GRASS ROOT NEWS

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Wood Group Secures Major BP Contract

11 Dec 2014

Wood Group has been awarded a five year contract with an estimated value of $750million from BP. Under the contract Wood Group PSN (WGPSN), will deliver engineering, procurement and construction services to six UK continental shelf (UKCS) offshore upstream assets and the Forties Pipeline System (FPS) onshore midstream facilities in Grangemouth.

Effective January 2015, the contract will create 150 new jobs and secure more than 700 existing positions. This is WGPSN's largest contract award in 2014 and includes an option for two, one-year extensions.

WGPSN already provide engineering, procurement and construction services for six BP offshore assets - Clair, Magnus, ETAP, Andrew, Bruce, and its new Glen Lyon FPSO which is currently being constructed and is due to come online in 2016. This is the first time WGPSN has secured a contract for the FPS onshore facilities and adds to the company's current contract to support BP's Sullom Voe Terminal in Shetland.

Dave Stewart, UK managing director of WGPSN said: "Wood Group has more than 40 years of experience working with BP globally and this new contract is testament to the partnership and understanding we have developed. "Providing this combined service across upstream and midstream operations for the first time positions us well for continued excellence in delivering safe, collaborative and innovative services directed at maximizing productivity and efficiency across BP's assets in the UK.

In the UK, Wood Group now employs more than 10,000 people working onshore and offshore.

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Saudi Aramco And ExxonMobil Joint Venture Completes Clean Fuels Project

11 Dec 2014

Saudi Aramco Mobil Refinery Company Limited (SAMREF), a joint venture of Saudi Aramco and ExxonMobil, has completed construction of major desulfurization facilities, including a new hydrotreater, that dramatically cuts sulfur levels in gasoline and diesel.

The SAMREF partnership, which is celebrating 30 years of joint refining operations, demonstrates the long-term collaboration and progress towards meeting the energy needs of Saudi Arabia’s growing economy. The project is the largest investment in SAMREF’s history and will reduce the sulfur levels in gasoline and diesel by more than 98 percent, to 10 parts per million, which makes the refinery an industry leader in emissions reduction.

“Our long-term partnership benefits from the technology and innovation from both companies,” said Khalid Al-Falih, President and CEO of Saudi Aramco. “Our refinery will continue to be an industry leader throughout the Middle East and in the global market place well into the future. It is also testimony of Saudi Arabia’s long-standing role as a reliable energy supplier to key geographic areas of the world.”

“We continue to apply advantaged technology that will deliver world-class products that contribute to the fuels value chain,” said Darren Woods, senior vice president of Exxon Mobil Corporation. “The successful, recent startup of the Clean Fuels Project illustrates the refinery’s advancements and preparations to meet global energy demands.”

Mohammad Al Naghash, president and chief executive officer of SAMREF, said, “The company contributes to the global competitiveness of the Kingdom of Saudi Arabia by providing world class fuels, but also creating jobs and improving the surrounding environment.”

About Saudi Arabian Oil Company and Mobil Yanbu Refining Company, Inc.

SAMREF is a joint venture between the Saudi Arabian Oil Company (Saudi Aramco) and Mobil Yanbu Refining Company Inc. (a wholly owned subsidiary of Exxon Mobil Corporation). The SAMREF refinery complex was formed for the development, construction, ownership and operation of crude oil refining facilities in Yanbu, Saudi Arabia. Following the construction and start-up of the facilities, it commenced operations in late 1984.

About Saudi Aramco

Saudi Aramco is the leading global integrated energy and chemicals company. We are driven by the core belief that energy is opportunity. From producing approximately one in every eight barrels of the world’s oil supply to developing new energy technologies, our global team is dedicated to creating impact in all that we do. We focus on making our resources more dependable, more sustainable and more useful. This helps promote stability and long term growth around the world. www.saudiaramco.com

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LNG co. plans $4 billion-plus Louisiana investment

December 10, 2014

CAMERON, La. — A liquefied natural gas company plans to build a more than $4 billion processing complex and export terminal in southwestern Louisiana. The plans were announced Wednesday by Gov. Bobby Jindal’s office and Venture Global LNG LLC. The completed project at Calcasieu (KAL’-kah-shoo) Pass is expected to result in 100 new long-term jobs for the area. Construction is expected to involve 1,500 workers. The announcement said the company is expected to take advantage of Louisiana’s property tax exemption for new investment plus a program that provides tax rebates for companies that create jobs. The Louisiana Economic Development department began formal discussions about the project with Venture Global in 2013.

“Venture Global’s investment in Louisiana is the latest in a long list of projects here in Southwest Louisiana that showcase our state’s energy infrastructure and our outstanding skilled workforce,” Jindal said in the news release. Construction is expected to begin at the 203-acre site in the third quarter of 2016. The liquefaction complex is expected to be operating by late 2019. “The Venture Global LNG export facility puts Cameron Parish at the forefront of liquefied natural gas trade,” said Stephen Broussard, West Cameron Port District director. Venture Global said the Calcasieu Pass project will be regulated principally by the Federal Energy Regulatory Commission. The company’s website says FERC approval for construction to begin is expected by October of next year.

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KBR plans major overhaul

11 December 2014 23:56 GMT

Contracting giant KBR plans a major overhaul of its corporate structure to streamline its operations with a focus on consulting, technology, engineering and construction and government services while divesting or exiting various "non-strategic" businesses. KBR, the Houston engineering and construction company, announced a major restructuring of its business Thursday morning that will sharply reduce the number of its business units and eliminate 1,000 jobs. The company will go from 16 business segments to five, CEO Stuart Bradie said during an investor conference.

Bradie joined the company as CEO in June and has been reviewing operations for a restructuring since. His goal, he said, was to "identify those businesses where we feel like we're world class and where we're differentiated."

"We've reduced the silos, we've brought the business together," he said. In a statement Thursday, the company said it aimed to "simplify the structure, reduce overhead costs and create a more market-focused business." KBR will now focus on five core areas that fall under global hydrocarbons and international government services. It will focus on providing government services to governments in the U.S., U.K. and Australia.

HOUSTON, Dec. 11 (UPI) -- Services company KRB said Thursday it was streamlining its business operations to focus on core strengths in hydrocarbons and government services.

The company, which has headquarters in Houston, said it was reorganizing into three business units -- technology and consulting, engineering and construction, and government services -- effective Dec. 31. "The restructure we are announcing today will create a new KBR focused on its core strengths structured along delivery lines that will enable us to meet the expectations of our customers and other stakeholders," KBR President and Chief Executive Officer Stuart Bradie said in a statement.

The company is among the latest in the sector to revise its long-term plans in an era when global crude oil prices are on a long-term decline.

KBR said it's combining services ranging from consulting services for the oil and gas sector to engineering, procurement, construction, commissioning and maintenance for oil and gas, refining, petrochemicals, chemicals and industrial customers. Within the last two months, KBR has signed deals in the refining sector of Saudi Arabia and in the exploration and production sector of Norway, two of the world leaders in terms of overall oil production.

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Weaker US dollar aids Brent crude oil price increase towards $65

11 December 2014

The price of Brent crude oil increased towards $65 a barrel today amid a weaker US dollar. Reuters reported that North Sea Brent crude increased 44 cents to $64.68, while US crude rose 41 cents to $61.35. "Next year, demand for OPEC's crude is expected to decline to its lowest in more than a decade." Jefferies senior oil broker in London Christopher Bellew was quoted by Reuters as saying: "Brent could be seeing a bit of short-covering and it could have quite a sharp rally after yesterday, but the market would still look just as bearish."

Prices continued to remain close to a five-year low amid indications that the current supply glut is expected to further increase in 2015. Next year, demand for OPEC's crude is expected to decline to its lowest in more than a decade, according to the oil cartel. Saudi Arabia Oil Minister Ali al-Naimi said the kingdom's output had remained steady in November and there was no need to cut production. Saudi Arabia and its Gulf allies asked other OPEC members to combat the growth of US shale.

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See where Houston job growth is expected in 2015

Dec 12, 2014

After several years of extraordinary growth, Houston's economy will grow at a slower pace in 2015, the Greater Houston Partnership estimates.

GHP's annual Houston Employment Forecast, released Dec. 11, estimates the metropolitan area will add 62,900 jobs in 2015, and the year should finish with more than 3 million total nonfarm payroll jobs.

That figure seems significantly less than the current pace of growth, in which Houston added 120,000 jobs between October 2013 and October 2014, but GHP calls the current pace unsustainable.

For comparison, Houston created an average of 48,600 jobs per year from 1994 to 2013. Even removing the three best years and three worst years, the average is 58,400 jobs per year.

GHP attributes much of the recent economic momentum to the boom in energy and exports, as well as Houston's population growth. Over the past four years, the city added 500,000 residents, half of which were births and the other half relocations.

Falling oil prices and slower global growth will have a negative impact on Houston's energy and export sectors next year, but the city will still add another 125,000 residents.

Construction on ethane crackers, chemical plants and liquefied natural gas terminals planned for the region; the opening of William P. Hobby Airport's new international terminal; and U.S. gross domestic product growth in general will also help Houston's economy next year.

Here's where jobs will be added or lost in Houston in 2015:

• Energy: GHP anticipates a significant drop in oil field services (7,900 jobs) and a minor drop in oil and gas exploration (1,300 jobs).
• Construction: Growth expected to slow marginally, with the sector adding 8,200 jobs.
• Manufacturing: Expected to lose 3,300 jobs, as the decline in oilfield equipment and fabricated metals manufacturing will outweigh the increase in demand for chemicals, plastics and other nondurables.
• Wholesale trade: Expected to add 3,500 jobs, though some sectors will struggle
• Retail: Expected to add 6,600 jobs, a slight dip from recent hiring.
• Transportation, warehousing and utilities: Expected to add 2,600 jobs, though the wide variety of subsectors will be affected differently.
• Information: This sector, which includes news media, movies, software and other subsectors, is expected to create only 100 jobs.
• Financial: Expected to slow somewhat, adding 1,900 jobs.
• Professional, scientific and technical services: Growth will slow, with 9,300 jobs added.
• Administrative, support, waste management and remediation services: Expected to add 8,400 jobs, though outsourcing is expected to continue.
• Educational services: Expected to add 1,200 jobs.
• Health care: Expected to add 9,200 jobs.
• Arts, entertainment and recreation: Expected to add 700 jobs.
• Accommodation: Expected to add 1,000 jobs.
• Food services: Expected to add 8,300 jobs, though growth will be tempered compared to recent years.
• Other services: Slower growth expected, with slightly more than 2,200 jobs added.
• Government: Expected to add 1,200 jobs.

Even during periods of prolonged low oil prices, Houston added jobs, GHP's report concludes. During the 1990s, oil prices averaged about $20, and Houston still added 500,000 jobs, though no individual sector dominated.

"For the third time in three decades, Houston is about to enter an era of relatively low oil prices," GHP's report states. "Yet by all measures, Houston is better off now than it was in the '80s, '90s or even the past decade. In the short term, growth may slow, but it always rebounds." 00000000000000000000000000000000000000000000000000000

Technip backs out of CGG takeover talks

French oilfield services provider Technip has pulled out of CGG takeover talks.

Technip approached its compatriot CGG, a seismic acquisition specialist, with a view to making an offer on November 10, 2014 and announced its intents to the press on November 20. At the time, the plan was for the proposed transaction to take the form of a public tender offer in cash for CGG’s shares at a price of 8.30 euros per share.

According to Technip, a number of alternative options were put forward to a tender offer, however the discussions of those options did not result in an agreement. The company reports that under these circumstances, it does not intend to file a tender offer for CGG. CGG said in the statement that, since the beginning of the approach, it remained open to dialogue and studied all proposals of Technip taking into account the interests of its shareholders, clients and employees. According to CGG, the board considered that none of the proposed options were creating value for the company and its stakeholders.

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Daewoo scores USD 1.24 billion LNG order

Daewoo Shipbuilding & Marine Engineering (DSME) of South Korea has been awarded a US1.24 billion (KRW1.365 trillion) deal to build six LNG tankers for an unnamed European company. DSME expects to deliver the LNG tankers by March 31, 2019, it said in a filling to the stock exchange. Majority of this year’s newbuild orders have been won by South Korea’s shipbuilders, confirming the country’s dominance in the global LNG

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CB&I Awarded Plant Services Contract Renewal

10 Dec 2014

CB&I (NYSE: CBI) today announced it has been awarded a contract renewal valued at approximately $80 million by a leading producer of high-performance specialty materials products for long-term maintenance, operations, engineering and other industrial services at multiple manufacturing facilities throughout the U.S.

"CB&I is committed to providing our customers with real time operational improvements in an environment where safety is paramount," said Patrick K. Mullen, President of CB&I's Engineering, Construction and Maintenance operating group. "This award is the continuation of a long-term relationship with the customer, and we will continue to evolve our services to help them reach their current and future goals."

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Cronus to produce ammonia – urea in Tuscola – Illinois

December 10,2014

The Chicago-registered company Cronus Chemicals LLC (Cronus) has selected Tuscola in the State of Illinois to build a greenfield nitrogen fertilizer plant to produce ammonia and urea in USA. USA is the third largest consuming country of fertilizer in the world after China and India as this consumption is mostly driven by the size of its population and of it agricultural related sector. Typically the fertilizers are based on three different natural resources, natural gas to produce nitrogen-based fertilizer such as ammonia and urea, and ore to extract potash and phosphate rocks.

Phosphate fertilizer are mostly produced in China, USA, India and Russia, while the potash extraction is concentrated in Canada, Russia and Belarus. Instead, the nitrogen fertilizer can be produced everywhere natural gas is available, meaning that it gives USA a special role in this market regarding the import-export and ammonia and urea.

As one of the largest importer of ammonia and urea after India, USA is offering a unique opportunity for investors to convert these trading activities in local production in taking advantage of the shale gas glut. Currently www.projectsmartexplorer.com trackers report more than 20 nitrogen-based fertilizer projects in North America. While most of these projects are concentrated in North Dakota, Iowa, Indiana, Louisiana, Oklahoma, Cronus selected Tuscola in Illinois, USA.

Cronus fertilizer to benefit from Illinois infrastructure

In the same way the shale gas revolution is currently converting previous US liquefied natural gas (LNG) import terminal into LNG plant and export facilities, it gives the opportunities for nitrogen-based fertilizer traders to become a local manufacturer such as Cronus Chemicals. Well supported by dynamic marketing activities and the profitability provided by the gap between the fertilizers global market prices and low prices of the shale gas, these companies have easy to propose investors attractive projects in USA.

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Amec captures Captain FEED

15 December 2014 08:59 GMT

Amec Foster Wheeler has secured a front-end engineering and design contract for platform work on Chevron’s Captain enhanced oil recovery project in the UK North Sea, confirming an earlier Upstream report.

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Shale boom spurs chemical industry expansion

December 11, 2014

The U.S. chemical industry is expanding at a healthy clip thanks to a domestic drilling renaissance that has flooded the world with cheap oil and gas. The industry grew by 2 percent this year and is expected to swell further next year as advances in drilling and completion technologies unlock vast new supplies of hydrocarbons that chemical companies rely on to make products and fuel their plants, according to the American Chemistry Council’s annual year-end review of the industry. “The wind is back in our sails,” Kevin Swift, chief economist for the trade group, said in a statement. “During the second half of the decade, U.S. chemistry growth is expected to expand at a pace of more than 4 percent per year on average, exceeding that of the overall U.S. economy.”

The surge in domestic oil production has ignited a building spree in the petrochemical industry. In recent years, more than 215 new production projects worth $135 billion have been announced as companies scramble to take advantage of the cheap U.S. shale gas that gives them a cost advantage over their foreign competitors. Production, which grew in all regions this year, will accelerate as these projects start to come online in 2017, with the Gulf Coast seeing the biggest surge, the council said. “We’re in the midst of a historic expansion and the U.S. remains the most attractive place in the world to invest in chemical manufacturing,” council CEO Cal Dooley said in a statement. Falling oil prices will only add to the economic boon. As crude plummets to its lowest level in five years, manufacturers will spend less to produce products while cheaper gasoline pumps money back into consumer’s pocketbooks, spurring more disposable spending, the council said.

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Crude fall raises prospects of layoffs in Wyoming

December 12, 2014

CASPER, Wyo. — Falling oil prices are raising the prospects of layoffs in Wyoming’s oil patch as companies look to cut costs. The benchmark U.S. oil price slipped to fresh five-year lows Friday morning, trading at under $59, after topping $100 this past summer. The price of Wyoming sweet crude had fallen to about $53 a barrel Thursday, according to Chevron. The drop in prices carries widespread implications in Wyoming, where a recently revived oil industry has bolstered payrolls and state coffers.

Industry executives and analysts say both employment and revenues could suffer as a result of the price decline, though they noted that the extent remains unclear. Companies are now looking at their budgets to see where they can cut costs, they said. They predicted oil field services could be particularly affected. “It’s that sector where we see the layoffs soonest, or the job gains, whereas the drilling (employment) is the same,” said Jim Robinson, a state economist, told the Casper Star-Tribune.

In October, about 4,300 people were employed in oil extraction, or drilling, Robinson said. About 13,400 people worked in mining support activities, with the vast majority of those laborers employed by oil and gas, he said. November’s jobs report, which is due out next week, will offer the first glimpse of whether oil companies are paring back payrolls, Robinson said. Jack Vaughn, CEO of Peak Powder River Resources, an oil firm active in the Powder River Basin, said companies are talking with their vendors and contractors about how to cut costs.

“Obviously everyone’s concerned about reduction in labor. Right now, we’re not seeing a big impact of that,” Vaughn said. “I think the industry as a whole is pulling together in this current downturn and doing what it takes to continue on.” Peak Powder plans to continue on its current development plan for 2015, but beyond 2015, the company is adopting a wait-and-see attitude, Vaughn said. Drilling is not likely to slow in the short term because the oil being produced now is sold on contracts that have already been signed, said Dan Guerttman, COO of Granite Peak Development, a Casper firm behind two oil-to-rail facilities in Wyoming. However, those contracts will end, and much of the drilling in Wyoming will slow as companies turn the focus to more established fields in states like North Dakota, he said.

Much of the spotlight locally is on the larger companies in the state, which are now developing their budgets for 2015. How much money they allocate for drilling in Wyoming will determine how the coming year plays out, Guerttman said. “I think the general mood is caution. People are not panicking, but everyone is looking at how to limit their expenses,” he said. Granite Peak’s Casper rail facility transports oil from Canada, so it will not be affected by a decrease in local production. The company is planning to start large-scale oil shipments from its Cheyenne facility, Swan Ranch, near the first of the year, Guerttman said.

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Halliburton slashes 1000 jobs

World’s second largest provider of oilfield services, Halliburton, will let a thousand workers go, according to reports. The layoffs will affect workers in Europe, Asia, Africa and Middle East, while there will be no workforce cuts in America. Reportedly, Halliburton spokesperson told AFP that the job cuts were necessary for Halliburton to work through challenging market environment. Halliburton has a workforce of more that 80,000 employees, representing 140 nationalities in over 80 countries.

Oil prices have fallen more than forty percent since June, urging oil companies to cut spending, which in turn has largely affected the supply chain firms. Even Schlumberger, world’s biggest oilfield services provider, recently said it would reduce its headcount to cut costs. Halliburton did not reply to an e-mail sent by Offshore Energy Today, seeking more information on the reported layoffs.

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Petronas gets green light for Canada Pacific Northwest LNG project

BC approved Lelu Island LNG trains and PRGT pipeline

British Columbia Province Authorities have approved Petronas Pacific Northwest liquefied natural gas (PNW LNG) export terminal project and its related TransCanada Prince Rupert Gas Transmission (PRGT) pipeline project on the Canada west coast.

The joint venture Progress Energy Canada Ltd (Progress Energy) and its stakeholders, the national oil company (NOC) Petronas, Japan Petroleum and Exploration Corporation Ltd (Japex), Indian Oil Corporation Ltd (Indian Oil) and Petroleum Brunei made a major step forward for the construction of one of the largest LNG export terminal project to be built on the Lelu Island, near Prince Rupert in BC.

In 2013, Petronas, Japex and Petroleum Brunei acquired the Calgary-based Progress Energy.

In 2014, Petronas sold 15% to China Petroleum & Chemical Corporation (Sinopec) and 10% of its stakes to Indian Oil so that currently the working interests in Progress Energy are shared as following:

- Petronas 62% is the operator

- Sinopec 15%

- Japex 10%

- Indian Oil 10%

- Petroleum Brunei 3%

In order to supply this Pacific Northwest LNG project with natural gas, Progress Energy and its partners in the North Montney joint venture (NMJV) explored and developed natural gas reserves in the Northeast of British Columbia, along the Province of Alberta. At the end of 2013, Petronas and its NMJV partners declared to have accumulated 8.35 trillion cubic feet (tcf) of proven and probable (2P) reserves of natural gas between the Montney Basin in BC, the Deep Basin and the Foothills in Alberta. In addition, Petronas and its NMJV partners are targeting to delineate 65 percent of 24.7 tcf contingent resources.

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KBR announces major restructuring that includes job cuts

December 11, 2014

KBR, the Houston engineering and construction company, announced a major restructuring of its business Thursday morning that will sharply reduce the number of its business units and eliminate 1,000 jobs. The company will go from 16 business segments to five, CEO Stuart Bradie said during an investor conference. Bradie joined the company as CEO in June and has been reviewing operations for a restructuring since. His goal, he said, was to "identify those businesses where we feel like we're world class and where we're differentiated." "We've reduced the silos, we've brought the business together," he said. In a statement Thursday, the company said it aimed to "simplify the structure, reduce overhead costs and create a more market-focused business."

KBR will now focus on five core areas that fall under global hydrocarbons and international government services. It will focus on providing government services to governments in the U.S., U.K. and Australia. "We've put a special emphasis on our consulting services," Bradie added. He said KBR will exit four areas: stand-alone fixed price engineering and constructing power infrastructure, fixed price U.S. infrastructure and U.S. minerals, and fixed price stand-alone construction businesses, and its building group.

The company expects the changes will cut $200 million in operating costs by 2016. KBR now employs about 27,000, and Bradie said it will have about 26,000 employees following its transformation. In its most recent quarter, the company reported $30 million in net income, compared to $47 million in losses in the same period last year. Earnings per share were 21 cents compared with a loss of 32 cents per share in the same period last year.

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BP to spend $1 billion to cut jobs restructures

Dec 10, 2014, 1:39pm CST

London-based BP PLC (NYSE: BP), which is one of Houston's top employers, plans to spend $1 billion in "restructuring charges" through 2015 in order to implement hundreds of jobs cuts and structural changes. BP is reducing staff by cutting mid-level managers across the board in production, refining and in corporate offices across the U.S., including Houston, and the United Kingdom. The oil giant has cited declining oil prices and escalating costs from the still-pending penalties of the 2010 Deepwater Horizon disaster in the Gulf of Mexico. BP has already made $43 billion in global divestments in the last few years.

In the short term, it can cost money to close plants, buy out employees and more in order to save money in the long run. "Although the current environment is challenging, BP is well-positioned to respond and manage our upstream business for the long term," said Houston-BP Upstream Chief Executive Lamar McKay. "We expect to see growth from our conventional and deepwater assets and an increasing contribution from gas. And we also have a quality pipeline of opportunities that we believe are capable of extending underlying growth well beyond 2020."

Current crude oil prices are hovering below $65 a barrel. BP noted that it approves projects at $80 a barrel projections, but that it tests each project at as low as $60 a barrel. BP said it could further reduce its capital expenditures for 2015 by $2 billion or so, which would be down from the $24 billion to $26 billion capital spending plan announced earlier in the year.

"We are clearly a more focused business now and, without diverting our attention from safety and reliability, our goal is to make BP even stronger and more competitive," BP Chief Executive Bob Dudley said in a prepared statement. "The simplification work we have already done is serving us well as we face the tougher external environment. We continue to seek opportunities to eliminate duplication and stop unnecessary activity that is not fully aligned with the group's strategy."

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Phillips Files for Permit to Build Condensate Splitter in Sweeny, TX

December 08, 2014

HOUSTON, Dec 8 (Reuters) - Phillips 66 is seeking a permit to build a condensate splitter at the company's 247,000 barrels-per-day (bpd) refinery in Sweeny, Texas as as the company mulls the export of condensate, a super-light form of crude oil without violating a decades-old U.S. crude export ban. The permit application filed earlier this month with the Texas Commission on Environmental Quality identifies the project as a "simplified condensate splitter unit" and is a step in the company's ongoing study of the project.

The splitter, as well as an Eagle Ford crude and condensate pipeline and a second 110,000 bpd fractionator at the refinery site "are currently in the engineering design and permitting phase," spokesman Dennis Nuss said on Monday. Phillips 66 executives have said the company is evaluating the export of condensate, a super-light form of crude oil.

Phillips 66 is building a liquefied petroleum gas export facility in Freeport, Texas, which is near the Sweeny refinery complex where a 100,000 bpd fractionation plant also is under construction.

The 200,000 bpd pipeline, as proposed, would stretch from the condensate-heavy Eagle Ford shale in South Texas to the company's Freeport terminal, and could be expanded to 400,000 bpd. The company says it will make final decisions on those projects next year.

"A decision on condensate processing will also be made in 2015," Nuss said.

The new pipeline would be in addition to a 100,000 bpd lateral line that connects Kinder Morgan Inc's 300,000 bpd Eagle Ford-to-Houston crude and condensate pipeline to the Sweeny refinery.

A splitter breaks up condensate into various components, such as naphtha, a building block for gasoline, and diesel and jet fuel.

At least three companies have received U.S. government approvals to export condensate that has undergone less sophisticated processing than that provided by a splitter.

Rather, running condensate through a stabilizer that removes natural gas liquids and contaminants was deemed enough to qualify the output as a refined product that could be exported without violating the decades-old crude export ban.

Even so, several other splitter projects are under construction or planned along the Texas Gulf Coast. Kinder Morgan aims to start up the first of two 50,000 bpd splitters in January, and Magellan Midstream Partners and Targa Resources Partners LP also have projects in the works. (Reporting by Kristen Hays; Editing by Terry Wade and Marguerita Choy)

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ConocoPhillips cuts budget 20 percent amid lower oil prices

Dec 8, 2014, 11:11am CST

Amid falling oil prices, ConocoPhillips (NYSE: COP) said Dec. 8 its capital budget for 2015 is $13.5 billion, down about 20 percent from its 2014 budget of $16.7 billion.

The Houston-based company said the decrease reflects reduced spending on major projects, several of which are nearing completion, and deferred spending on North American unconventional plays. However, it expects production to grow 3 percent next year from continuing operations, excluding Libya.

Here's a basic breakdown of ConocoPhillips' 2015 capital expenditure budget:

• Base maintenance:$1.9 billion, down slightly from 2014
• Development drilling programs:$5 billion, down from $6.5 billion in 2014
• Major projects:$4.8 billion, a "significant reduction," according to ConocoPhillips
• Exploration and appraisal:$1.8 billion, down slightly from 2014

Within its development drilling programs, ConocoPhillips plans to continue to target the Eagle Ford and Bakken, while deferring significant investment in emerging North American unconventional plays, such as the Permian, Niobrara, Montney and Duvernay. In addition to unconventional activity in North America, exploration and appraisal spending will focus on conventional activity in the Gulf of Mexico, offshore West Africa and Nova Scotia.

In 2014, the major-projects portion of ConocoPhillips' budget included peak spending at the Australia Pacific LNG Project and Surmont Phase 2. Next year, major-project spending will focus on completion of those two projects, plus multiple projects in Alaska, Europe and Malaysia.

"We are setting our 2015 capital budget at a level that we believe is prudent given the current environment," Ryan Lance, chairman and CEO, said in a statement. "This plan demonstrates our focus on cash flow neutrality and a competitive dividend, while maintaining our financial strength." He also noted that the capital program has significant flexibility.

"Spending on several major projects has peaked and we will get the benefit of production uplift from those projects over the next few years," Lance said in the statement. "In addition, we have significant identified inventory in the unconventional, where we also retain a high degree of capital flexibility." ConocoPhillips is the Houston area's second-largest public company, based on its 2013 revenue of $53.2 billion, according to Houston Business Journal research. Its stock was down about 3 percent, trading around $65.66, as of midday Dec. 8

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Phillips 66 boosts 2015 budget

Dec 5, 2014, 1:21pm CST

Phillips 66 (NYSE: PSX) said Dec. 5 its capital budget for 2015 is $4.6 billion, up 18 percent from what it spent in 2014. Including spending for joint ventures DCP Midstream, Chevron Phillips Chemical Co. and WRB Refining, Phillips 66 expects its total capital program to be $6.8 billion next year. Last year, Phillips 66 announced its 2014 capital budget of $2.7 billion, not including joint ventures, in December and increased that to $3.9 billion in July.

Here's a basic breakdown of the company's 2015 budget:

• Midstream:$3.16 billion, plus $550 million for its share of DCP's expenditures
• Chemicals:$1.45 billion for its share of Chevron Phillips' capital expenditures
• Refining:$1.11 billion, plus $203 million for its share of WRB's capital expenditures
• Marketing and specialties:$170 million
• Corporate and other:$155 million

Phillips 66 more than doubled its midstream spending from last year's initial budget. Midstream spending includes the ongoing construction of the Sweeny Fractionator One and the Freeport LPG Export Terminal on the Gulf Coast, as well as pipeline and rail infrastructure projects to move crude oil from North Dakota throughout the U.S. Phillips 66 also is pursuing an expansion of the Beaumont Terminal and related infrastructure opportunities, the company said. Midstream spending also includes $207 million that Phillips 66 Partners LP, a master limited partnership, plans to spend on organic growth projects.

"The 2015 capital program reflects our commitment to grow our higher-value businesses while enhancing returns in refining," Chairman and CEO Greg Garland said in a statement. "We are executing a portfolio of major midstream and chemicals projects while evaluating a significant backlog of investment opportunities."

The company increased its dividend 28 percent during 2014 and expects double-digit increases for the next two years, Garland said. Through Sept. 30, Phillips 66 returned $3.9 billion of capital to shareholders through dividends, share repurchases and divesting Phillips Specialty Products Inc., and the company still had $2.6 billion available under its share repurchase authorization. "Our plans for significant growth in enterprise value are supported by our 2015 capital budget and our commitment to a 60/40 ratio of reinvestment to distributions," Garland said in the statement. "Disciplined capital allocation and operating excellence remain our top priorities."

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Exxon: North America will be a net exporter, oil will last 150 years

Dec 9, 2014, 3:19pm CST

Mobil Corp. (NYSE: XOM) predicts that North America will become a net exporter of oil and natural gas by 2020, according to the company's 2015 Outlook for Energy: A View to 2040 released Dec. 9. Advances in technology mean there's enough crude oil to satisfy demand for another 150 years, according to the study. To get an idea how far technology such as hydraulic fracking and horizontal drilling has come, in 1981, it was estimated that crude oil would run out in 60 years.

Irving, Texas-based Exxon, which has a significant presence in Houston, says global demand for energy will increase 35 percent by 2040, driven by population growth and a global middle class. Fossil fuels will continue to meet about 75 percent of the world's energy needs through 2040, though renewable energy will grow by about 6 percent per year, according to the study.

That middle class will grow from 2 billion in 2010 to nearly 5 billion by 2030, or about half the world's population. The majority of that growth comes from India and China.

Oil and natural gas liquids from shale will propel the United States toward being a net exporter, opening up new trade opportunities with Asia. Unconventional shale drilling for natural gas will nearly triple by 2030 throughout North America. Exxon predicts North America could surpass the combined natural gas production from Russia and the Caspian region.

Demand for natural gas could increase 65 percent by 2040, even surpassing coal in global use. Exports from Africa will decline as demand for oil grows in that region. Other highlights of the report:

• Energy for electricity generation accounts for half the demand growth
• New hydraulic fracking technologies make it possible for oil and gas to meet 65 percent of global energy demand growth.
• Oil will continue to be the number one energy source with demand increasing by 30 percent.

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