cedigaz team wishes the members a very happy … christmas and a wonderful 2010. ... tenders have...

Vol. 48, n° 29, December 23, 2009

Paris, December 17, 2009

Cedigaz team wishes the Members a very Happy Christmas and a wonderful 2010.

Cedigaz News Report - Vol. 48, n°29, December 23, 2009

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Vol. 48, n° 29, December 23, 2009

Contents

Liquefied Natural Gas p3- BRAZIL : Technip wins FLNG FEED contract. -. CAMEROON : Progress made on Kribi LNG project. -. PAPUA NEW GUINEA : PNG LNG project approves EPC contract with Chiyoda and JGC. -. PAPUA NEW GUINEA : Government approves InterOil's LNG project agreement. p4-. RUSSIA : CH-Oil&Gaz plans LNG processing plant in Nenets Autonomous District. -. CHINA : Fifth LNG carrier delivered. -. AUSTRALIA : Chevron signs LNG supply deal with Tokyo Electric Power. -. AUSTRALIA : Chevron and Chubu Electric sign LNG deal agreement from Gorgon project. p5-. PAPUA NEW GUINEA : Sinopec and PNG LNG sign LNG sale and purchase agreement. -. WORLD : LNG demand forecasted to increase by 24% in 2010. -. WORLD : Global demand needs large LNG projects. p6-. UNITED STATES : FERC authorizes Jordan Cove LNG project and reaffirms approval for Sparrows Point LNG project.

Natural Gas -. CHINA : Husky announces gas discovery in the South China Sea. -. COLOMBIA : Rancho Hermoso-5 well success extends the Rancho Hermoso field. -. HUNGARY : Ascent Resources provides update on Penészlek drilling operations. -. LIBYA : Hess announces successful well test in the Arous Al-Bahar prospect. p7-. NORWAY : Statoil discovers gas near Norne. -. AUSTRALIA : Final investment decision made for development of Yolla field. -. EGYPT : Technip awarded EPC contract of Delta Deep Marine development. -. INDONESIA : Inpex starts gas production from North Belut field. p8-. NETHERLANDS : Northern starts production from Grolloo gas field. -. PAKISTAN : Compressors will help to stop declining pressure of Qadirpur gas field. -. RUSSIA : Gazprom and Petrovietnam sign agreement of strategic partnership. -. TRINIDAD AND TOBAGO : BP announces first phase of Serrette development. -. TRINIDAD AND TOBAGO : Savonette field starts production. p9-. BOLIVIA : Ryder Scott to certify gas and oil reserves. -. QATAR : End of North Field moratorium delayed. -. AUSTRALIA : Technip wins FEED contract of Wheatstone offshore processing platform. -. AZERBAIJAN : Gas Processing Plant becomes an independent unit. p10-. CANADA : WorleyParsons wins contract for Fort Nelson North processing facility. -. AUSTRALIA : Origin secures gas transportation agreement with Epic. -. CENTRAL ASIA : Turkmenistan to China gas pipeline ready to enter in operation. -. CENTRAL EUROPE : Eustream and FGSZ conclude another phase gas connection between Slovakia and Hungary. -. CHINA : Planning route of third West-to-East pipeline concluded. p11-. EUROPE : Nord Stream receives permit for Russian section of Baltic Sea gas pipeline. -. FRANCE : GDF Suez facilitates increased access to gas network capacities. -. UNITED STATES : FERC approves Pacific Connector Gas Pipeline. -. UNITED STATES : Port Dolphin receives FERC certificate for pipeline. -. BOLIVIA : Brazil agrees to pay more for gas supply. p12-. CHINA : Cities will pay more for Central Asia gas. -. ISRAEL : Noble Energy reaches agreement for sale of gas from the Tamar field. -. RUSSIA : Poland agrees on new gas supply deal. -. RUSSIA : Gazprom exports to China will be equivalent to around one third of Europe gas supplies. -. TANZANIA : Orca Exploration starts gas sales to Tegeta power plant. p13-. WORLD : Gas Exporting Countries Forum planned to be fully operational in 2010. -. RUSSIA : Gazprom wants to improve UGS reliability and efficiency. -. AUSTRALIA : Neerabup Power Station starts operation. -. CHINA : NF Energy awarded construction of phase I of a power plant project in Shangai.


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LNG

PROCESSING BRAZIL : Technip wins FLNG FEED contract – CNR/48/29/1 Technip plus its partners JGC and Modec are primed to start a lump sum contract for the front-end engineering design work for a proposed floating liquefied natural gas unit after landing the deal for the Petrobras-led project in Brazil. The project, which is evaluating FLNG, is being carried

out by a joint venture formed between Petrobras, BG, Repsol and Galp Energia in Brazil’s pre-salt province in the Santos basin. This project would be the first FLNG unit in Brazil and is to be designed for a capacity of about 2.7 million tonnes per annum of LNG, Technip said. The FEED study is scheduled to be completed by the end of 2010. (Upstream, December 21, 2009)

CAMEROON : Progress made on Kribi LNG project – CNR/48/29/2 GDF Suez said recently that significant progress on the development of an LNG plant project in Cameroon has been made. Preliminary studies concluded that the optimal solution to export LNG from Cameroon is an onshore production plant located in the area of Kribi and fed by a national gas-aggregation network connecting known gas resources. Tenders have been issued to select engineering firms for the Pre-FEED engineering studies for the project, which will include gas gathering pipelines and an onshore LNG plant with a production capacity of up to 3.5 million tons per annum, to be located in the area of Kribi on the Southern Coastline of Cameroon. GDF Suez and Cameroon's Societe Nationale des Hydrocarbures or SNH will jointly manage the study, which is expected to be awarded at the beginning of 2010. (Dow Jones, December 11, 2009) PAPUA NEW GUINEA : PNG LNG project approves EPC contract with Chiyoda and JGC – CNR/48/29/3 Chiyoda Corporation and JGC Corporation jointly announced that Esso Highlands Limited, operator of the PNG LNG Project, has approved an engineering, procurement and construction contract award to a joint venture of Chiyoda and JGC, pending final project authorizations. The scope of the work is for a 6.6 million tonnes per annum LNG plant, with two 3.3 million trains, including facilities for inlet processing, treating,

liquefaction, storage, and loading. Participating interests are affiliates of Exxon Mobil Corporation (including Esso Highlands Limited as operator, 33.2 percent), Oil Search Limited (29.0 percent), Independent Public Business Corporation (PNG Government, 16.6 percent), Santos Limited (13.5 percent), Nippon Oil Exploration (4.7 percent), Mineral Resources Development Company (PNG landowners, 2.8 percent) and Petromin PNG Holdings Limited (0.2 percent). (Chiyoda press release, December 9, 2009)

PAPUA NEW GUINEA : Government approves InterOil's LNG project agreement – CNR/48/29/4 InterOil Corporation announced recently that the National Executive Council (NEC) of Papua New Guinea has approved the Company's project agreement for the construction of a liquefied natural gas plant in Papua New Guinea. As previously announced, the proposed LNG project would be developed by InterOil and its joint venture partners, including foundation partner Pacific LNG Operations Ltd. The Government of Papua New Guinea, through its nominee Petromin PNG Holdings Limited, will have up to a 22.5% equity interest in the project. The project targets a $7.0 billion two-train LNG facility, with each train capable of producing approximately 4 million tons of LNG per annum. While current plans call for first production of LNG towards the end of 2014 or beginning of 2015, InterOil is progressing a proposed liquids stripping plant, to be located in Gulf Province, in late 2011/early 2012. The approved project agreement, which is expected to be signed before the end of 2009, establishes the terms for commercializing and monetising the Elk/Antelope natural gas resources. InterOil expects that natural gas produced will be treated at a conditioning plant in the Gulf Province and then transported to the proposed LNG plant site near the Company's existing refinery at Napa Napa. InterOil anticipates that the LNG plant will be designed to operate as a tolling facility, and that the LNG will be jointly marketed by the upstream owners on behalf of the joint venture. (PRNewswire, December 10, 2009)


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RUSSIA : CH-Oil&Gaz plans LNG processing plant in Nenets Autonomous District – CNR/48/29/5 CH-Oil&Gaz LLC held recently an introduction of the project on the construction of liquefied natural gas plant in Nenetsk Autonomous District. LNG plant is planned to be built as an alternative to the gas-chemical complex project for commercialization of gas reserves of Kumzhinskoye and Korovinskoye fields. According to the feasibility study that is prepared by Technip, it is planned to start the construction of the factory and all needed infrastructure in 2011. This complex shall allow to commercialize 3,9 billion cubic meters of dry gas per year at the first stage. It will be possible to increase production up to 7,8 bcm in the future. The plant may be launched in 2015, simultaneously with the starting of the production at the fields. Viacheslav Pershukov, chief executive officer said “Initially we

considered only one way of commercialization of the reserves by constructing of gas-chemical complex near Indiga village. But recently the new opportunities were opened for independent Russian operators in LNG segment. In September, 2009 the Prime Minister Vladimir Putin stated that now it is an important task to take the leading positions on the LNG market. It is not a secret that the construction of the LNG plant in Nenetsk Autonomous District requires more approvals and is subject to various regulations; nevertheless we decided to consider such a way. Simultaneously with the development of pre-project documentation for the LNG plant, gas transmission infrastructure and marine facilities, we negotiate on strategic cooperation with foreign companies. We hope that our project shall make a valid contribution into realization of the plans of our country”. (Energy Business Review, December 3, 2009)

TRANSPORTATION-DISTRIBUTION CHINA : Fifth LNG carrier delivered – CNR/48/29/6 China’s fifth liquefied natural gas carrier was recently delivered to its owner in Shanghai. The vessel is named "Dapeng Star" and was built at Hudong-Zhonghua Shipbuilding (Group) Co Ltd in Pudong. It will be used by the Guangdong LNG project to carry the fuel from Australia. The Shanghai-based shipyard is preparing to take an order for its sixth LNG carrier, which is set to be used to carry fuel from Malaysia to Shanghai's Yangshan Deep-Water Port. (Shanghai Daily, December 12, 2009)

SUPPLIES - IMPORTS – EXPORTS AUSTRALIA : Chevron signs LNG supply deal with Tokyo Electric Power – CNR/48/29/7 Chevron Australia recently signed an offtake agreement with Tokyo Electric Power Co. to sell 4.1 million tonnes/year of LNG from the Wheatstone project over a 20-year term. In addition, Tepso is planning to acquire a 15% interest in the Wheatstone field licenses along with an 11.25% interest in the proposed gas

processing facilities planned for Ashburton North near Onslow on the Western Australian coast. The initial stage for Wheatstone will have a capacity to produce 8.6 million tonnes/year of LNG and will also include the domestic gas plant. Chevron expects to make a final investment decision on the project in 2011. (Oil & Gas Journal, December 7, 2009)

AUSTRALIA : Chevron and Chubu Electric sign LNG deal agreement from Gorgon project – CNR/48/29/8 Chevron Corporation announced recently that its Australian subsidiaries have signed binding long-term Sales and Purchase Agreements (SPAs) with Chubu Electric Power for a portion of Chevron's share of liquefied natural gas from the Gorgon Project. Chevron agreed to supply Chubu Electric 1.44 million metric tons per year of LNG for 25 years. Also, Chubu Electric intends to

purchase 0.417 percent equity from Chevron's stake in the Gorgon Project. The Gorgon Project is operated by Chevron, which will have an approximate 47 percent interest in the project after the sale to Chubu. The initial Gorgon Project development, in northwestern Australia, will include a three-train, 15 million-metric-tons-per-year liquefied natural gas facility and a domestic gas plant. (Chevron press release, December 16, 2009)


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PAPUA NEW GUINEA : Sinopec and PNG LNG sign LNG sale and purchase agreement – CNR/48/29/9 Unipec Asia Co., Ltd., a subsidiary of China Petroleum & Chemical Corporation and Esso Highlands Limited, a subsidiary of Exxon Mobil Corporation and operator of the Papua New Guinea Liquefied Natural Gas (PNG LNG) Project, announced recently that Sinopec Corp. and the

project participants have entered into a binding sales and purchase agreement for the long-term sale and purchase of LNG totalling approximately 2.0 million tonnes per annum. Under the agreement, the PNG LNG Project will supply LNG to Sinopec Corp.’s LNG terminal in Shandong Province, for a period of 20 years. (Sinopec press release, December 3, 2009)

WORLD : LNG demand forecasted to increase by 24% in 2010 – CNR/48/29/10 BP Chief Economist Christof Ruhl said recently that the world market demand of LNG in 2010 is predicted to increase up to 24 percent. “This condition must be used in full advantage by gas exporter countries like Indonesia,” he said BP Plc. However, Indonesia unfortunately has to compete with other countries in the LNG development in the future according to Ruhl, especially on the country’s plan to become the first country in the world to produce coal bed methane. “Indonesia is not the only country that produces CBM. Now Australia and China are trying to become the first country that can produce LNG from CBM,” he added. (VIVAnews, December 4, 2009) WORLD : Global demand needs large LNG projects – CNR/48/29/11 Tom Walters, president of ExxonMobil Gas and Power Marketing Company said recently that large-scale liquefied natural gas projects will be necessary to meet increasing global demand for natural gas. Walters said "We expect global energy demand to grow from about 230 million barrels a day of oil equivalent in 2005 to over 300 MBDOE by 2030 – an increase of almost 35 percent". Walters added "The ability to conceptualize, commercialize and execute large-scale, multi-billion dollar projects has become an increasingly important differentiator, which will remain over the coming decades". Walters noted that the economics of LNG projects require execution on a much larger scale than traditional local supplies. "As we have seen with the new trains that we have been starting up with our partners in Qatar, the development of LNG requires large-scale projects. This creates challenges for our industry because with scale comes complexity. Maximizing the return of large-scale projects requires selecting the right design concept, developing effective marketing plans and executing the project to deliver it at the lowest cost". Recognizing that all types of energy are required to meet demand, Walters said: "Not only will energy demand be much larger in 2030 than it is today, the mix of fuels used to meet that demand will change as well. Gas in particular will play an increasingly important role in meeting the world's future energy needs, growing at 1.8 percent over the 2005 to 2030 period"

LNG Crowne Plaza Hotel, St. James, London, United Kingdom

22nd & 23rd March 2010

SMi’s LNG 2010 conference will bring together renowned industry leaders, financiers and expert consultants to discuss issues and find solutions that are essential to ensure the success of your LNG business. The programme will explore the major projects in Europe, Australia, Asia and Africa covering the most imminent commercial, financial and technical aspects of LNG trade in a challenging environment. Make sure you attend this event and take away all the key business techniques that can help you successfully thrive in the current market. Key benefits of attending: • Understand key strategies to ensure the long term security of your LNG supplies • Analyse the global market dynamics to spot the best opportunities for your business • Benchmark on the success of your industry peers by learning about their new projects For more information visit; http://www.smi-online.co.uk/10lng34.asp Or contact Sam Hunter on Tel. +44 (0) 29 7827 6115 or Email. [email protected]

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STORAGE

UNITED STATES : FERC authorizes Jordan Cove LNG project and reaffirms approval for Sparrows Point LNG project – CNR/48/29/12 The Federal Energy Regulatory Commission authorized recently a new liquefied natural gas import terminal proposed by Jordan Cove Energy Project, L.P. and Pacific Connector Gas Pipeline, LP. Separately, FERC reaffirmed its Jan. 15, 2009, order authorizing the AES Sparrows Point LNG LLC (AES) import terminal near Dundalk in Baltimore County, Md., and the related Mid-Atlantic LLC (Mid-Atlantic) pipeline project. The Jordan Cove LNG import terminal would be located in the North Spit of Coos Bay in Coos County, Oregon, and would provide up to 1 billion cubic feet of gas per day to customers in the Pacific Northwest through interconnections with several existing pipeline systems. The 234-mile Pacific Connector pipeline would transport the gas from the terminal to a point near Malin, Klamath County, Oregon, on the Oregon/California border. The AES terminal would send out gas at a rate of up to 1.5 Bcf/d, which would be transported through the 88-mile Mid-Atlantic pipeline to Eagle, Pa., where the new pipeline would interconnect with several existing interstate pipelines serving customers in the Mid-Atlantic and Northeast. (FERC press release, December 17, 2009)

NATURAL GAS

EXPLORATION – DISCOVERY CHINA : Husky announces gas discovery in the South China Sea – CNR/48/29/13 Husky Oil China Ltd., a wholly-owned subsidiary of Husky Energy, made recently a significant gas discovery on Block 29/26 in the South China Sea. The West Hercules deepwater drilling rig completed the drilling and testing of the LH 34-2-1 exploration well. The well tested natural gas, with a high liquids yield, at an equipment restricted rate of 55 million cubic feet per day, with indications that the well's future deliverability could exceed 140 mmcf per day. The front end engineering

design for the Liwan 3-1 Field Development Project is at an advanced stage and the LH 34-2 Field will be tied into the planned offshore infrastructure. Husky expects the plan of development for the Liwan 3-1 Field to be submitted to the regulatory authorities in early 2010. First gas production is targeted to be in the 2013 timeframe. Company is planning an appraisal well in early 2010 to determine the full potential of the LH34-2 field. (Oilvoice, December 9, 2009)

COLOMBIA : Rancho Hermoso-5 well success extends the Rancho Hermoso field – CNR/48/29/14 Ecopetrol announced recently that drilling at the Rancho Hermoso-5 well has confirmed the presence of hydrocarbons in the Guadalupe and Los Cuervos formations in the Rancho Hermoso block, located on the basin of the Eastern Plains in the province of Casanare, Colombia. The results of the initial tests carried out by the operator report that the Guadalupe formation reached a production of 3,990 barrels of oil per day 33°API and approximately 400,000 cubic feet of gas per day and Los Cuervos formation (located above the Guadalupe formation) reached a production of 4,434 barrels of oil per day, 36° API and 400,000 cubic feet of gas per day. (Ecopetrol press release, December 17, 2009) HUNGARY : Ascent Resources provides update on Penészlek drilling operations – CNR/48/29/15 Ascent Resources plc announced recently an update on the activities of its Hungarian subsidiary PetroHungaria Kft. Production testing of the PEN-105 well on the Company's Nyirseg South permit in Northeastern Hungary, drilled and completed in August and September 2009, has yielded an initial flow rate of over 78,000 m3 of gas per day. This well is now shut-in awaiting the construction of the pipeline connection to the main export pipeline. (Oilvoice, December 4, 2009) LIBYA : Hess announces successful well test in the Arous Al-Bahar prospect – CNR/48/29/16 Hess Corporation announced recently that its fully-owned subsidiary Hess Libya Exploration Limited has carried out a successful test of its discovery well A1-54/01 offshore Libya in the Mediterranean Sea. Well A1-


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54/01 was originally drilled in the Arous Al-Bahar prospect in 2008. The well flowed at a rate of 27 million standard cubic feet of good quality natural gas per day and 533 barrels of condensate per day on a 52/64 inch choke. (Oilvoice, December 2, 2009) NORWAY : Statoil discovers gas near Norne – CNR/48/29/17 Statoil discovered recently gas two kilometres south-west of the Norne field in the Norwegian Sea during the drilling of exploration well 6507/3-8. The find is estimated to contain 1.3-1.5 billion standard cubic metres of recoverable gas. No formation test was carried out in the well, which

lies in 378 metres of water, but extensive data was gathered and cores were taken. Producing the discovery through a tie-in to Norne will be considered by the licensees in production licence 159 B. The group has an 85% interest in PL 159 B, with Dong E&P Norge AS holding the remaining 15%. (Statoil press release, December 16, 2009)

PRODUCTION AUSTRALIA : Final investment decision made for development of Yolla field – CNR/48/29/18 Origin Energy Resources Limited as operator of the BassGas Joint Venture announced recently that the final investment decision has been made for the Yolla Mid-Life Enhancement (“MLE”) project. Origin’s Executive General Manager, Mr Paul Zealand said “The initial field development plan included additional drilling and subsequent export compression, to extend field production. The joint venture is also seeking to upgrade the offshore production facilities. Two development

wells, Yolla-5 and Yolla-6, will be drilled and on-platform pumping and compression equipment will be installed to extend the production life of the Yolla gas field. On-platform construction and drilling activity is expected to commence in the December quarter of 2010 using. The additional wells and accommodation facilities are expected to be operational by the June quarter of 2011. The pumping and compression facilities are expected to be operational by mid 2012. (Origin Energy press release, December 18, 2009)

EGYPT : Technip awarded EPC contract of Delta Deep Marine development – CNR/48/29/19 Technip has been awarded a $95 million lump sum engineering, procurement, installation and construction contract by Burullus Gas Company SAE for the West Delta Deep Marine (WDDM) Phase VII development project off Egypt. The project is designed to maintain overall plateau production for the WDDM Concession, located 95 kilometres offshore Egypt in the Mediterranean. It covers turnkey delivery of the tie-in structure between a new gas export pipeline and two existing pipelines, including “hot tap tie-ins” that allows the work to be carried out without stopping the ongoing production. Offshore installation is scheduled for the fourth quarter of 2010. Burullus Gas Company SAE is a joint operating company of Egyptian General Petroleum Corporation (EGPC) 50%, BG Group 25% and PETRONAS 25% conducting oil and gas operations on behalf of the WDDM partners. (Pipeline Magazine, December 13, 2009) INDONESIA : Inpex starts gas production from North Belut field – CNR/48/29/20 INPEX Corporation said recently that its wholly-owned subsidiary, INPEX Natuna, Ltd. together with its co-venturers, ConocoPhillips (the operator) and Chevron Corporation, has started natural gas production from the newly developed North Belut gas field, in the South Natuna Sea Block B production sharing contract on November 16, 2009. It is planned to ramp up to sustained gas production rates in excess of 200 MMscfd and condensate and LPG of over 20,000 barrels per day in 2010. An active and continuing development drilling program will add this production capacity from start up throughout

2010. The project includes drilling and completing numerous wells; engineering, procurement, construction and installation of two wellhead platforms, an intrafield pipeline, one central processing platform and export pipelines to the Kerisi pipeline end manifold where it will connect with the existing Block B pipeline infrastructure. The liquefied petroleum gas produced will supply the Indonesian domestic market. The North Belut field is located offshore in the South Natuna Sea, Indonesia, and is about 1,180 kilometers north of capital city of Jakarta. ConocoPhillips operates the field with a 40% participating interest while Chevron holds a 25% and INPEX holds a 35%. (Energy Business Review, December 3, 2009)


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NETHERLANDS : Northern starts production from Grolloo gas field – CNR/48/29/21 Northern and its partners announced recently that they have started gas production from the Grolloo gas field, the first of four gas and two oil fields planned for development onshore The Netherlands. The Grolloo facilities have been commissioned and first gas sales commenced on December 4th 2009 at a daily rate of 200,000 normal cubic metres a day. Development of all four gas fields (Grolloo, Geesbrug, Wijk en Aalburg and Brakel) will be completed by early 2010. These will produce in aggregate daily rate of up to 800,000 m³ per day in 2010. This gas is the first production following the agreement between Northern Petroleum Nederland B.V. (NPN), a wholly-owned subsidiary of Northern Petroleum Plc and Nederlandse Aardolie Maatschappij (NAM). NPN, the operator has a 45% licence interest. EBN, the Netherlands’ state oil company and Dyas hold 40% and 15% respectively. Gas from Grolloo is being delivered via a dedicated pipeline to the NAM operated Vries facilities and then on to the Westerveld process facilities. Geesbrug will be the next field to be brought on-stream employing a similar scheme of development. (Northern Petroleum press release, December 8, 2009) PAKISTAN : Compressors will help to stop declining pressure of Qadirpur gas field – CNR/48/29/22 Six out of 14 compressors being imported by Oil and Gas Development Company Limited (OGDCL) to save the Qadirpur gas field from declining gas pressures are expected to reach the site by the end of December 2009, OGDC spokesman said recently. OGDCL will install 14 compressors as interim relief to maintain the declining pressures from the field, he said, adding that the remaining compressors are expected to arrive early February 2010. In the recent board meeting, the OGDCL management informed that the installation of compressors would be completed by June 2010. The meeting was informed that these compressors were being installed for a period of around 2-3 years and after that large compressors from another OGDCL field Pirkoh would be installed at Qadirpur field. (Dawn, December 21, 2009) RUSSIA : Gazprom and Petrovietnam sign agreement of strategic partnership – CNR/48/29/23 Alexey Miller, Chairman of the Gazprom Management Committee and Phung Dinh Thuc, President and CEO of Petrovietnam State Oil and Gas Corporation signed recently an Agreement on Strategic Partnership. The Agreement contemplates intensive cooperation between Gazprom and Petrovietnam in oil and gas projects in Russia, Vietnam and third countries to be implemented by Gazpromviet, a joint venture being set up. In particular, the parties will consider the possible engagement in the Orenburg Oblast located Nagumanovskoye oil, gas and condensate field development, as well as in exploration and development of subsurface resources in the Republic of Sakha, Eastern

Siberia and the Far East. Gazprom and Petrovietnam will set up a Joint Coordinating Committee and a Joint Working Group to ensure successful execution of the accords reached. Alexey Miller and Phung Dinh Thuc signed an Addendum to the Oil and Gas Contract on block 112 offshore Vietnam. The Addendum makes the terms and conditions of the Contract compliant with the decisions previously taken by the Vietnamese Government on extending the scope of the Contract to cover adjacent blocks 111 and 113 and on executing two oil and gas contracts (block 112 and blocks 129–132) by a single operator, the Vietgazprom Joint Operating Company. In addition, an Agreement was signed on setting up the Gazpromviet joint venture. (Gazprom press release, December 15, 2009)

TRINIDAD AND TOBAGO : BP announces first phase of Serrette development – CNR/48/29/24 BP announced recently that the first phase of the project in the Northern Area of the Columbus basin about 32 miles north of the Mango field will capture as much as 700 million cubic feet of equivalent with five wells. Serrette will be linked to the existing pipeline for export through the Cassia B gas processing hub. (Upstream, December 18, 2009) TRINIDAD AND TOBAGO : Savonette field starts production – CNR/48/29/25 BP Trinidad and Tobago (BPTT) announced recently the start of natural gas production from the Savonette field, offshore Trinidad. Savonette is located approximately 50 miles off Trinidad's south east coast. BPTT holds a 100 per cent interest in the field. Production from the platform is tied into BPTT's Mahogany B platform, via a 26-inch diameter 5.3 mile subsea pipeline, where the gas is processed and then exported into


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BPTT's existing infrastructure. Gas from Savonette will supply Atlantic LNG's liquefaction plant for export as LNG to international markets, as well as the domestic market. Production from Savonette is expected to average 600 million standard cubic feet per day of gas, plus associated condensate, from four wells. (BP press release, October 28, 2009)

RESERVES

BOLIVIA : Ryder Scott to certify gas and oil reserves – CNR/48/29/26 Ryder Scott Company has been recently awarded a contract to certify and quantify Bolivia’s large reserves of natural gas and smaller ones of oil, the president of state-owned Yacimientos Petroliferos Fiscales Bolivianos, Carlos Villegas said. The final results will be presented in August 2010. According to Villegas, YPFB – by certifying and quantifying its reserves – will be better able to monitor the development plans of the energy firms operating in Bolivia. Bolivia’s reserve estimates

still are based on a 2005 report by DeGolyer & MacNaughton, which found the country had a total of 48.7 trillion cubic feet of proven and probable reserves of natural gas, including 26.7 trillion cubic feet of proven reserves. In mid-2006, the Bolivian government terminated its contract with DeGolyer & MacNaughton, accusing the company of manipulating its results for political purposes after it said in a report that year that the country’s proven gas reserves had fallen from 26.7 trillion cubic feet to 18 trillion cubic feet. (Reuters, December 18, 2009)

QATAR : End of North Field moratorium delayed – CNR/48/29/27 Qatar extended recently the five-year moratorium on further development of its vast North Field gas reservoir to 2014 as part of its gas production strategy to sustain the field’s reserves, said Saad Al-Kaabi, Director Oil and Gas Ventures with Qatar Petroleum. Doha placed a moratorium on additional natural gas development projects in 2005 at the North Field to allow time to study field development optimisation. The gas field, which is shared by Iran, could reduce reservoir pressure and possibly damage its long-term production potential due rapid development. The reserves and structure assessment was initially expected to

end until after 2009, a period when all the planned North Field gas projects have been brought on stream. The North field holds natural gas reserves at 900 trillion cubic feet. “Year 2014 is a decisive point – a time where QP will decide what is in the best interest of the country and the field,” Al-Kaabi said. “If after 2014 we take a decision to go ahead with new development then the priority will be to ensure that we have enough capacity available for electricity, water desalination in the long-term for the country, our local industrial needs and only then we will think about export,” he said. (Pipeline Magazine, December 13, 2009)

PROCESSING AUSTRALIA : Technip wins FEED contract of Wheatstone offshore processing platform – CNR/48/29/28 Technip recently won a front end engineering design (FEED) contract from Chevron Australia for offshore processing platform associated with the Wheatstone project. The upstream (offshore) portion of the project comprises development of gas fields in the WA-17-R and WA-253-P petroleum titles located on the Northwest Shelf offshore Western Australia. Subsea gas gathering systems will transport production to the processing platform where the gas and condensate will be respectively dehydrated, dewatered, compressed and exported through a 200 kilometers export pipeline to the onshore gas plant located at Ashburton North, 12 kilometers west of Onslow, on the Pilbara coast of mainland Western Australia. (Energy Business Review, December 14, 2009) AZERBAIJAN : Gas Processing Plant becomes an independent unit – CNR/48/29/29 Azerbaijan's Ministry of Taxes said recently that the Gas Processing Plant had been granted state registration in November 2009. The only shareholder is the State Oil Company of Azerbaijan. A decree issued turned the Gas Processing Plant into an independent unit, similar to Azerigaz or the Azneft production association. At the same time SOCAR has plans to upgrade the plant. The Gas Processing Plant was commissioned in 1961 with an annual capacity of 4.5bcm. (News.az, December 4, 2009)


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CANADA : WorleyParsons wins contract for Fort Nelson North processing facility – CNR/48/29/30 WorleyParsons has been recently awarded an engineering, procurement and construction management services contract for Spectra Energy’s Fort Nelson North Processing Facility Project located in British Columbia, Canada. The project involves the design and construction of facilities, including a new natural gas plant, to

process raw shale gas from the Horn River Basin area of northeast British Columbia. The new natural gas plant, located adjacent to Spectra Energy’s existing Cabin Lake booster station will have the capacity to process 250 million cubic feet per day of inlet gas. The facility is scheduled for commercial start-up in early summer, 2012. (WorleyParsons press release, December 4, 2009)

TRANSPORTATION-DISTRIBUTION AUSTRALIA : Origin secures gas transportation agreement with Epic – CNR/48/29/31 Origin Energy Limited advised recently that it has secured long term gas pipeline capacity to link its Eastern Australian portfolio following completion of a gas transportation agreement with Epic Energy. A conditional gas transportation agreement had been signed between Origin and Epic in June 2009. Epic announced that it would be proceeding with the expansion of capacity on the 937 kilometre South West Queensland

Pipeline and QSN Link from Wallumbilla to Moomba. The agreement covers the transportation of up to 1,200 PJ of gas over 22 years from January 2012 with extension options over some capacity for up to a further 10 years. It also includes additional long term capacity on the Moomba to Adelaide pipeline and options to further expand the capacity of the South West Queensland Pipeline in the future. (Origin Energy press release, December 15, 2009)

CENTRAL ASIA : Turkmenistan to China gas pipeline ready to enter in operation – CNR/48/29/32 The pipeline running from Central Asia to China begun recently to transport natural gas. The route stretches around 1,120 miles from Turkmenistan through Uzbekistan up to Kazakhstan's border with China and then extends more than 2,800 miles into China itself. Turkmen gas deliveries to China through the pipeline are expected to hit around 6 billion cubic meters in 2010, and those supplies will increase incrementally every year until they reach 40 billion cubic meters in 2015. (Associated Press, December 20, 2009) CENTRAL EUROPE : Eustream and FGSZ conclude another phase gas connection between Slovakia and Hungary – CNR/48/29/33 Eustream and FGSZ concluded recently another phase of the planned construction of interconnection between the transmission networks of Slovakia and Hungary. The objective of the non-binding phase of the open season was to provide a platform market participant to express interest in the new connecting gas pipeline between the Slovak town of Veľké Zlievce and Hungarian town of Vecses. The peak capacity covered by non-binding requests in both flow

directions total approximately 6 billion m3 a year (of which approximately 70% in the direction from Slovakia to Hungary and 30% in direction from Hungary to Slovakia). The next step leading towards constructing the gas pipeline connection will be the binding phase, in which the registered applicants from the non-binding phase, as well as new applicants, registering in the binding phase, will be able to submit their binding offers for required capacity in the planned gas pipeline. The binding phase starts in March 2010. (Eustream press release, December 22, 2009)

CHINA : Planning route of third West-to-East pipeline concluded – CNR/48/29/34 The third West-to-East natural gas pipeline has completed its planning route, though the plan is still subject to government approval, reported C1 Energy. C1 Energy cited a source from the China Petroleum Planning and Engineering Institute as saying that the third West-to-East pipeline's route will originate in Xinjiang, just as the second West-to-East pipeline, but that its end destination may lie in Sichuan, Guangdong, or Fujian provinces. The third West-to-East pipeline's route partly overlaps with the second West-to-East pipeline, allowing the former' construction to have already begun, said C1 Energy. The third pipeline, with its capacity equal to the second's of 30 billion cubic meters, will start operation in 2012 as planned. (Xinhua News Agency, December 7, 2009)


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EUROPE : Nord Stream receives permit for Russian section of Baltic Sea gas pipeline – CNR/48/29/35 Nord Stream received recently a permit to construct the 123-km Russian section of its 1,223-km pipeline through the Baltic Sea. The consortium had already received permits from Denmark and Sweden through whose waters the pipeline will pass, and the Finnish EEZ permit. The permitting process in Germany is also nearing completion. The Russian offshore permit was granted by the Russian Federal Supervisory Natural Resources Management Service (Rosprirodnadzor). “We are firmly on schedule to start construction of the pipeline in spring 2010 and to start transporting gas in 2011,” said Nord Stream’s MD Matthias Warnig. (Offshore, December 18, 2009) FRANCE : GDF Suez facilitates increased access to gas network capacities – CNR/48/29/36 The European Commission accepted recently the commitments GDF Suez proposed in July 2009. The Group’s commitments have been confirmed after market testing. Significant market capacities available at the LNG terminals of Montoir-de-Bretagne (1 or 2 bcm per year, approximately 30% of the terminal’s total capacity, starting

October 1st 2010 until 2035) and Fos Cavaou (2 bcm per year, approximately 40% of GDF Suez capacities starting January 2011 over 20 years), as well as gas entries in France at Taisnières, Obergailbach and eventually Dunkirk; Beginning in 2014, over 10 years, establishment to less than 50% of GDF Suez share of long term natural gas entry capacities in France. (GDF Suez press release, December 3, 2009)

UNITED STATES : FERC approves Pacific Connector Gas Pipeline – CNR/48/29/37 Pacific Connector Gas Pipeline, LP announced recently that the Federal Energy Regulatory Commission (FERC) has issued a certificate order approving an application to construct and operate the Pacific Connector Gas Pipeline, a 234-mile, 36-inch diameter natural gas pipeline. The project is designed to import and transport up to 1 billion cubic feet of natural gas per day from the liquefied natural gas terminal in Coos Bay to Malin, Ore. The project will provide an additional source of natural gas supply to markets in the Pacific Northwest, northern California and northern Nevada. (Electric Energy Online, December 18, 2009) UNITED STATES : Port Dolphin receives FERC certificate for pipeline – CNR/48/29/38 Port Dolphin Energy, LLC, announced recently that the Federal Energy Regulatory Commission has issued a certificate of public necessity and convenience to build and operate an on-shore pipeline to connect to its deepwater liquefied natural gas port off the West Coast of Florida. Located 28 miles off Tampa Bay, the new

deepwater port will deliver natural gas through an undersea pipeline to connect with the state's pipeline system four miles inland from Port Manatee. Port Dolphin's deepwater port will have peak send out capacity of up to 1.2 billion cubic feet per day. Construction of the port is set to begin in 2012 with completion in 2013. (Downstream Today, December 7, 2009)

SUPPLIES - IMPORTS – EXPORTS BOLIVIA : Brazil agrees to pay more for gas supply – CNR/48/29/39 Petrobras agreed recently to pay tens of millions of dollars more per year for imported Bolivian natural gas after a long price dispute. For years, Bolivian President Evo Morales has urged its larger neighbour to pay more for imports of around 24 million cubic meters per day that provide around half of Brazil's natural gas supply. Petrobras will pay an additional $100 million for 2007, when the two sides agreed Brazil should

pay more but had not yet settled an a payment formula. The two countries have not yet agreed on additional payments for 2008 and 2009. The deal gives Bolivia additional payments for the ethane, propane and butane contents of its gas. Brazil previously paid only for the less valuable methane. Carlos Villegas, President of YPFB said Bolivia would eventually build two plants that will separate different forms of natural gas, which would simplify its billing for Brazil imports. (Reuters, December 18, 2009)


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CHINA : Cities will pay more for Central Asia gas – CNR/48/29/40 China National Petroleum Corp (CNPC) will sell imported natural gas from central Asia at up to 3,750 yuan a tonne, or about 3 yuan a cubic metre, to a city gas distributor in southern China in 2011, a rate far above existing domestic prices. Under an agreement reached in 2007, CNPC will supply Shenzhen Gas Corp Ltd with 3.2 million tonnes of gas per year for a period of 25 years, Shenzhen Gas said recently. Shenzhen Gas

currently gets most of its gas from Guangdong Dapeng LNG, China's first liquefied natural gas terminal operator, at a price of 1.7 yuan per cubic metre. In July 2009, China's National Development and Reform Commission set the city-gate gas price in Shanghai at about 2 yuan a cubic metre for gas to be pumped, via a nearly 1,700 kilometre pipeline, from western Sichuan's Puguang field, which is operated by Sinopec. (Reuters, December 10, 2009)

ISRAEL : Noble Energy reaches agreement for sale of gas from the Tamar field – CNR/48/29/41 Noble Energy, Inc. announced recently that it has signed a Letter of Intent to sell natural gas from the Tamar field, offshore Israel, to Dalia Power Energies). Dalia, a private electricity company, has a license to build a natural-gas fired power plant in Israel with operations planned to commence in 2013. According to terms of the LOI, Noble Energy and its partners will deliver natural gas volumes of approximately 200 billion cubic

feet to Dalia under a 17-year supply agreement. Sales volumes under the LOI may be increased to 700 Bcf depending upon the final size of the power plant and extent of operations. Noble Energy operates Tamar, offshore Israel in the Matan license, with a 36 percent working interest. Other interest owners are Isramco Negev 2 with 28.75 percent, Delek Drilling with 15.625 percent, Avner Oil Exploration with 15.625 percent and Dor Gas Exploration with the remaining four percent. (Oilvoice, December 15, 2009)

RUSSIA : Poland agrees on new gas supply deal – CNR/48/29/42 Poland and Russia agreed recently on a new gas deal, Poland's economy ministry said. The deal now has to be approved by the Polish government and will be signed by the Prime Minister. Poland, which imports about two-thirds of its gas from Russia, faces an annual shortfall of 2.5 billion cubic metres from 2010 and needed a new deal to plug the gap as of 2010. Under the deal agreed by PGNiG PGNI.WA and Gazprom, Poland would import 10.3 billion cubic metres of gas annually directly from Gazprom until 2037, up from about 7-8 billion metres earlier. (Reuters, December 10, 2009) RUSSIA : Gazprom exports to China will be equivalent to around one third of Europe gas supplies – CNR/48/29/43 Gazprom spokesman Sergei Kupriyanov said recently "I believe that the volume of gas supplies to China will be about a third of the volume of our European gas supplies," Kupriyanov added "The eastern market will clearly not be as large as the European market, simply because it began developing later, but its development will be more

intensive than the European market over the coming years”. Gazprom Deputy CEO Alexander Medvedev earlier said that the Russian energy giant planned to increase gas exports to countries outside the Commonwealth of Independent States by 13% in 2010 from 2009 to 160.8 billion cubic meters and foreign currency proceeds by 18% to $50.3 billion. Gas exports to non-CIS countries in 2009 are expected to reach 142.5 billion cubic meters. (RIA Novosti, December 7, 2009)

TANZANIA : Orca Exploration starts gas sales to Tegeta power plant – CNR/48/29/44 Orca Exploration Group recently began the sale of natural gas to the newly commissioned Tegeta 45MW power plant at Dar es Salaam, Tanzania. With the addition of Tegeta, Orca is now selling additional gas to three power plants with a maximum additional gas demand of approximately 37Mmcfd. When combined with the industrial consumers, the maximum additional gas demand by existing customers is approximately 45 Mmcfd. The new Tegeta power plant, operated by Wartsila, is the expansion of Tanesco's power generating capacity. Tanesco is planning to add another 100MW of new gas-fired power generation in the Dar area in the next 15 months. Beyond 2010, Tanesco has started planning for the construction of a new 200MW power plant at Kinyerezi, Dar es Salaam that would require approximately 40MMcfd of natural gas. (Energy Business Review, December 18, 2009)


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WORLD : Gas Exporting Countries Forum planned to be fully operational in 2010 – CNR/48/29/45 Sergei Shmatko, Russia's energy minister said recently that the forum of natural gas exporting countries will be fully operational in 2010. "(Its formation) will be completed in 2010. Six countries have already ratified the documents” he said. The Gas Exporting Countries Forum (GECF), a "gas equivalent" of the OPEC oil organization, comprises Qatar, Russia, Algeria, Bolivia, Venezuela, Egypt, Iran, Libya, Nigeria, Trinidad and Tobago and Equatorial Guinea. Shmatko also said that the gas forum would play a key role in coordinating activity on the market of liquefied natural gas. At the same time, GECF Secretary General Leonid Bokhanovsky said that the forum had no intention of turning into a gas cartel. Bokhanovsky said that the gas forum was considering transforming the status of Kazakhstan and Norway as countries with the observer status into full-fledged members. The GECF official said that the organization's governance body would consist of Russian specialists at the first stage and would subsequently turn into an international team. (RIA Novosti, December 16, 2009)

STORAGE RUSSIA : Gazprom wants to improve UGS reliability and efficiency – CNR/48/29/46 Alexander Ananenkov, Deputy Chairman of the Gazprom Management Committee held recently a meeting dedicated to the criteria of technical and technological engineering in order to enhance the reliability and efficiency of underground gas storage facilities in Russia. Opening the meeting Alexander Ananenkov emphasized that development of new approaches to technical and technological engineering of UGS facilities would enhance reliability of storages as part of the Unified Gas Supply System and reduce construction and retrofitting costs. There are currently 25 UGS facilities operational in the Russian Federation with the commercial gas volume of 64 billion cubic meters, the peak daily send-out capacity of 620 million cubic meters as of the 2009–2010 autumn–winter period start-up, and the daily average send-out capacity of 500 million cubic meters in December–February. The Gazprom UGS Development Strategy up to 2030 hinges on the following basic principles: maintaining the achieved level of Russian UGS capacities by upgrading and replacing obsolete and depreciated capacities; accelerated building up Russia’s UGS daily send-out capacity by expanding the existing UGS facilities and building the new ones; providing UGS capacities for undersupplied regions of the Russian Federation; developing at best the UGS system along with UGSS, synchronizing UGS facility and gas trunkline operation regimes; expanding the UGS network abroad to store Gazprom’s gas for higher reliability and flexibility of gas exports, expanding the Company’s presence on the spot market. (Gazprom press release, December 15, 2009)

USE FOR POWER GENERATION AUSTRALIA : Neerabup Power Station starts operation – CNR/48/29/47 The Neerabup Power Station, located 35 km north of Perth, has been recently opened by Western Australian Energy Minister Peter Collier. The project, which includes an open-cycle gas-fired power station and a 30 km gas pipeline, will provide an additional 330 megawatts of electricity to meet growing peak demand on the South West Interconnected System. (Gas Today, December 4, 2009) CHINA : NF Energy awarded construction of phase I of a power plant project in Shangai – CNR/48/29/48 NF Energy Saving Corporation recently won bidding on Phase I of a gas-fired power plant project in Shanghai. Products will be delivered in May 2010. The gas-fired power plant is equipped with 4x350MW gas-steam combined cycle units. The plant is expected to improve the electricity supply in Shanghai and optimize power structure. (Energy Business Review, November 29, 2009)

CEDIGAZ NEWS REPORT is a internal publication of CEDIGAZ, edited by Thierry Rouaud with collaboration of Catherine Charlier. 11 eett 44,, aavveennuuee ddee BBooiiss PPrrééaauu,, 9922885522 RRuueeiill--MMaallmmaaiissoonn CCeeddeexx,, FFrraannccee TTeell.. ++3333 11 4477 5522 6600 1122 -- FFaaxx ++3333 11 4477 5522 7700 1144 WWeebbssiittee :: http://www.cedigaz.orghttp://www.cedigaz.org CCoonnttaacctt :: [email protected]@cedigaz.org

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