PETROL & ENERGY 18.05.2015

Speculators are losing faith in the oil rally, judging that OPEC will keep increasing supply from the highest level since 2012.

Their net-long position in West Texas Intermediate crude dropped 2.1 percent, as long wagers fell the most in two months and short bets declined to the lowest since August, U.S. Commodity Futures Trading Commission data show.

OPEC’s push to defend its share of the global oil market has just begun and its members may further increase production, the International Energy Agency said May 13. Saudi Arabia said it boosted output to the highest level in at least three decades. Oil explorers in the U.S. reduced the rig count last week by the least since December, diminishing the probability that supply will contract.

“Until we see some real tightening of supply the market is going to be vulnerable to a pullback,” Gene McGillian, a senior analyst at Tradition Energy in Stamford, Connecticut, said by phone May 15. Only “once we get evidence that the fundamentals are changing will prices be able to move higher,” he said.

Prices collapsed 46 percent last year as Saudi Arabia led the Organization of Petroleum Exporting Countries in maintaining production rather than cede market share to booming U.S. supply. The group has become more unified about keeping its output target because prices are now rising, Kuwaiti Oil Minister Ali Al-Omair said May 12. Ministers from the 12-member group are scheduled to meet in Vienna on June 5. 



Gambia: Erin Energy Corporation (NYSE MKT:ERN) announced today it has received executive approval to extend the initial exploration period for blocks A2 and A5 in The Gambia by 24 months to December 31, 2018. The work program includes the requirement to drill one exploration well in either block during the exploration period. The Ministry of Petroleum has also approved and will issue the necessary permits to proceed with the Company's planned multi-client 3D seismic data acquisition on blocks A2 and A5.

Ghana: An energy expert, Dr. Mohammed Amin Adam over the weekend expressed worry over the processes employed by Ghana before oil blocks were awarded to companies to operate. He said here during a training programme for members of Journalists Against Corruption Coalition organized by the Africa Centre for Energy Policy (ACEP) with support from the Open Society Initiative for West Africa (OSIWA). Speaking on the topic, “Local Content Regulation in Ghana,” Dr. Amin, Executive Director for energy policy think tank, ACEP said the current contracting process in the West African country made it extremely difficult to attain good governance, transparency and accountability in the sector. In spite of the Provisional National Defense Council (PNDC) Law 84 being explicit on a company’s technical competence and financial capability, he observed most oil companies contracted do not have the technical competence and financial capability to have been awarded oil blocks. Dr. Amin said, “Without technical competence and financial capability, some companies will make money illegally, delays the exploitation and production process as well as become a conduit for public officers to abuse their office.” 

Ghana: Thousands of Ghanaians marched peacefully through parts of the capital Accra to protest the government's failure to solve a three-year long electric power crisis that has sapped businesses and hindered economic growth. The march, organised by Ghanaian celebrities and artistes, drew a gathering of academics, civil servants and private business people which stretched half a kilometre through the streets of the city's eastern districts. The marchers, draped in black and red, held kerosene torches and candles as they chanted anti-government slogans. Among them was a man carrying a table-top refrigerator which he said was damaged by frequent power cuts. Economic growth in Ghana, once a favourite of investors in Africa, has been slowed by fiscal crisis that forced the government to seek International Monetary Fund support and undermined its reputation abroad for financial management. But it is the energy crisis that has crippled businesses at home and angered ordinary Ghanaians. Currently, the electricity company provides power for 12 hours out of a 36-hour cycle. 

Kenya: The construction of a crude oil pipeline linking Kenya, Uganda and South Sudan will begin in 2016, a Kenyan official said on Thursday. Lamu Port South Sudan Ethiopia (LAPSSET) Corridor Development Authority (LCDA) Director General Sylvester Kasuku told a media briefing in Nairobi that an inter-governmental agreement is currently being negotiated between Kenya and South Sudan and between Kenya and Uganda. “Transaction advisors for the pipeline that is aimed at evacuating crude oil from Kenya, South Sudan and Uganda to the Lamu Port for export are currently begin procured,” he said. Kasuku noted that the facility will be built under a public private partnership framework as the regional governments alone cannot finance the project. Kasuku said phase one of the project will include a 864km crude pipeline from Kenya’s coastal port of Lamu to the oil fields in Lokichar in Northwestern Kenyan. According to the Director General, the flow of first oil is expected by end of 2018. 

Mozambique: Anadarko Petroleum Corp. is poised to select a construction team led by Chicago Bridge & Iron Co. as its main contractor for a potential $15 billion Mozambique liquefied natural gas project, according to people familiar with the matter. CB&I’s shares climbed. The company and its engineering and construction partners will work with The Woodlands, Texas-based energy explorer to begin project planning with the East African nation’s government, according to the people who asked not to be identified because the information isn’t yet public. Anadarko has said it will make a final investment decision on whether to proceed with the project by the end of the year. The selection of CB&I’s group to build the export project is a key step in the process of developing one of the biggest oil and gas discoveries in a generation, one that has the potential to reshape East Africa and global markets. The decision is a milestone for one of the few energy mega-projects around the world to move forward after crude prices collapsed last year. Companies have halted spending on many such projects to conserve cash, reducing spending by more than $100 billion amid the oil market downturn. 

Namibia: THE Namibia Power Corporation will have to scrap its controversial multi-billion power project after the Ministry of Mines and Energy and the Electricity Control Board raised red flags. Although it is not clear where the project was supposed to be or when it was supposed to start, President Hage Geingob and attorney general Sacky Shanghala have expressed concerns about the project allegedly saying that it is not in the country's interest. The Namibian has learnt that the past week was hard for NamPower, after they failed to justify the project to government. Two meetings, one held at State House and another at the Electricity Control Board (ECB) offices, all ended in NamPower failing to garner support for the project. The 250MW project was supposed to be a stop-gap solution to the country's power needs while the Kudu gas project is being implemented. The 250MW project was first estimated to cost N$3 billion but sources said the cost has now escalated to N$7,6 billion. 

Nigeria: State owned Nigerian National Petroleum Corporation (NNPC) is seeking massive investment in country’s natural gas sector. According to a report published earlier this month in The Guardian Nigeria, Ohi Alegbe, the Group General Manager, Group Public Affairs, NNPC said in a statement that the measure was aimed at ameliorating the effect of drop in crude oil prices on the Nigerian economy. Group Managing Director, NNPC, Joseph Dawha, had stated this earlier at a panel session at the Offshore Technology Conference (OTC) in Houston, Texas, USA. He noted that in spite of the annual investment of millions of dollars in the last four years in gas supply and infrastructure, there was need for significant addition to infrastructure and supply development.

Nigeria: Nigeria has lost about $3bn (N600bn) in revenue from liquefied natural gas in the past one year, the Nigeria LNG has said. According to the firm, the loss is as a result of the slump in the global prices of crude oil, adding that the United States had completely stopped importing gas from Nigeria. The General Manager, Commercial, NLNG, Mr. Patrick Olinma, in a presentation he made during the firm’s Commercial Week 2015 in Abuja on Thursday, said the impact of the oil price fall had not only resulted in the devaluation of the naira by about 30 per cent, but had affected the country’s revenue earnings from gas supply. Explaining that the cost of importation had risen by about 30 per cent, he said the fall in the price of Nigeria’s Brent crude had led to a reduction in foreign revenue earnings for the country, stressing that this would affect projects. 

Nigeria: UOP LLC, a Honeywell company, announced that its process technology, catalysts and proprietary equipment will form the basis for the largest refinery in Africa, reducing Nigeria’s dependence on imported fuels and petrochemicals. Dangote Oil Refining Company selected UOP technology for a world-scale integrated refinery and petrochemical plant to be built in Lekki, near the capital of Lagos in southwestern Nigeria. Nigeria has the second-largest amount of proven oil reserves in Africa – an estimated 37.2 billion barrels, according to Oil & Gas Journal. However, the country currently imports most of its refined product requirements due to lack of domestic refining capacity. In addition to processing crude oil to produce high-quality gasoline, diesel and jet fuel that meet Euro V specifications for reduced emissions, the new facility will produce world-scale quantities of polypropylene, a key petrochemical used in plastics and packaging.

Seychelles: Australian hydrocarbons explorer WHL Energy announced on Wednesday that it has received a loan of $4 million from a U.S. investor, Magna Equities. WHL said in a press statement that the first tranche of $125,000 would be used to maintain its ongoing oil exploration activities in the Seychelles and its 'La Bella' gas prospecting project 200 kilometres west-southwest off the coast of Australia. In March, WHL Energy released a review of its preliminary 3D seismic survey data, which was conducted mid-2014 by WHL's farm-in partner Ophir in the 'Junon' exploration block 115 kilometres south-east of the Seychelles' main island of Mahé, revealing "large scale" high-grade prospects totalling a best estimate of over 500 million barrels of oil (MMbbls). The Indian Ocean archipelago of 115 islands has a vast oceanic territory, or Exclusive Economic Zone, of 1.3 million square km. WHL Energy holds a 12,856 square kilometre offshore exploration area in the Seychelles. 

Middle East

Iran: The Alpine Eternity oil tanker has been attacked by a number of small Iranian crafts in international waters, according to Reuters. The Singapore-flagged oil tanker was fired at by Iranian craft on Thursday and had previously collided with an Iranian oil drilling platform in March. Efforts have since been made to resolve the issue, the owner told Reuters on Friday. The owner, South Maritime Pte Ltd, and manager, Transpetrol TM, said in a joint statement that the tanker collided with an uncharted object on March 21 in the Middle East Gulf, which was later identified as an Iranian jacket platform. No one was injured and no pollution was spilled. 

Iran / UAE: Iran has inked a preliminary agreement with UAE to supply compressed natural gas (CNG). According to deputy head of the National Iranian Oil Refining and Distribution Company Mansour Riahi the gas will be transported on board CNG container, reported Mehr NewsThursday. Iran’s natural gas will be condensed in Assaluyeh on the Persian Gulf coast and carried by 40-foot carrier ships, Mehr News added. Riahi further stated that a preliminary agreement for sale of CNG has also been signed with Pakistan but implementation will take time. According to Press TV, Iran and the UAE already have a gas deal but it has run into trouble amid claims of kickbacks and other corruption charges. The deal with UAE’s Crescent Petroleum was signed in 2001 for exports of 17 million cubic meter of gas per day from Iran’s Salman field in the Persian Gulf for 25 years. Critics of the deal maintain that the price agreed is 14 times below the market value, Press TVadded. 

Iran: Iranian officials will meet with number of Europe firms next month to discuss gas exports, Shana News reported Wednesday quoting a senior official. Hamid Reza Araqi, deputy minister of petroleum, however did not mention the exact date or venue of the talks. Araqi, who is also managing director of the National Iranian Gas Company (NIGC), added that his company is in talks with foreign investors willing to invest in Iranian gas pipeline projects, but no agreement has been signed so far. “These companies are conducting negotiations [with NIGC] to discuss financing and investment” in Iran's gas pipeline projects, he added. Araqi’s comments come after Fars News, earlier this week, reported that European Union has started unofficial talks with Iran for imports of gas. 

Jordan: The Aqaba Special Economic Zone Authority has announced that the Kingdom will receive the first shipment of the liquefied natural gas (LNG) via a new specialised terminal, which its investment arm, Aqaba Development Corporation (ADC), has completed. According to the corporation's Chief Executive Officer Ghassan Ghanem, the development of the facility is part of a JD1 billion- port development master plan for the years 2005-2030, which is now at its "peak period". ADC's top executive said the LNG terminal, created to import liquefied gas as one alternative to the costly heavy oil used to generate electricity, is one of four energy ports, including the oil terminal, which is in the "hot operation status". The third is the liquefied propane gas terminal, dedicated to receive shipments of gas used in cylinder for cooking and heating purposes. The facility is also fully operational now, after upgrades that reduced unloading time by 50 per cent. 

Qatar / Bulgaria: Bulgargaz and Qatargas have agreed to work together in the field of energy, the Bulgarian government said Sunday. The two companies signed a letter of intent of cooperation in the presence of the two Prime Ministers and their delegations. Last year Sofia and Doha discussed the issue of supply of Qatari LNG to Bulgaria. The Eastern European country is also seeking Qatari investment in a major LNG terminal project in Greece that will diversify supply source to many Balkan countries in Europe. Currently, Bulgaria relies almost entirely on supplies of Russian natural gas to meet its needs and is looking to diversify its gas sources and supply routes. 

Qatar: Demand for OPEC’s crude will rise as the drop in oil prices below $100 a barrel continues to hinder shale production, Qatar Petroleum International’s Chief Executive Officer Nasser Khalil Al-Jaidah said. The Organization of Petroleum Exporting Countries decided in November not to cut its output target amid a price slump, which resulted from a global supply glut driven by sluggish demand and rising U.S. shale production. The decision roiled markets, contributing to a decline in prices of almost 50 percent last year. OPEC will “stick with” its earlier decision to maintain the output ceiling when it meets next month because of the recovery in prices this year, Abdulmajeed Al-Shatti, a member of Kuwait’s Supreme Petroleum Council, said in an interview on Tuesday. Qatar Petroleum, the world’s biggest producer of liquefied natural gas, will benefit from lower oil prices as it restructures the company by “shedding added costs that have accumulated in the past,” Al-Jaidah said. Qatar Petroleum International, QP’s foreign investment arm, will be taken over by its parent, which will focus more on foreign operations and investments as most domestic production projects have been completed, he added.

Saudi Arabia / Iraq: Rates for the world’s biggest oil tankers surged to the highest since January as shipments accelerated from Saudi Arabia and Iraq, the two biggest suppliers in the Persian Gulf. Ships hauling 2 million barrel cargoes of Saudi Arabian crude to Japan, a benchmark route, earned $81,513 a day, according to data on Friday from the Baltic Exchange in London. That’s a 13 percent gain from Thursday and the highest for the time of year since at least 2009. Saudi Arabia told OPEC it produced 10.3 million barrels a day last month, close to the highest level in three decades, as the world’s biggest exporter defends its share of the global oil market. Iraq’s crude exports next month will climb by almost 700,000 barrels a day to 3.75 million, compared with April, according to loading programs obtained by Bloomberg. The rate oil companies pay to charter the ships, known in the industry as very large crude carriers, or VLCCs, jumped 9.1 percent to 76.82 Worldscale points, a measuring system the industry uses to calculate per-ton freight costs on thousands of trade routes. Tanker rates rose on 15 out of 16 routes tracked by the Baltic Exchange, led by advances in prices from the Persian Gulf.

Saudi Arabia: Executives of Saudi Aramco and Dow Chemical toured the nearly completed Sadara complex in Jubail recently to inaugurate the first six plants and control rooms. Aramco said it used the opportunity to be updated by major contracting partners on the work that remains to be completed. The energy giant said collaboration had been crucial to the construction phase, a point made during individual meetings between Saudi Aramco’s Downstream senior vice president Abdulrahman F. Al Wuhaib, Dow Chemical’s CEO Andrew Liveris and the major construction and engineering contractor CEOs held during their tour. Al Wuhaib said that the meeting came at a time when the Sadara project is more than 90% complete, with a notable 1mn man-hours of planning, 9mn man-hours of engineering, and nearly 350mn man-hours of construction. At more than 90% complete, the Sadara complex is well on its way to becoming the world’s largest integrated chemical complex ever built in a single phase, with more than 3mn tons of capacity per year. 

Rest of the World

Australia: MEO Australia Limited (ASX: MEO) advises that it has accepted a offers from the National Offshore Petroleum Titles Administrator (NOTPA) to renew the AC/P50 and AC/P51 exploration permits for a further five years. The firm minimum work program requirement is for the first three years of the renewal and for each block consists of geological and geophysical studies and seismic data reprocessing. The discretionary secondary term work program, Years 4 and 5, contain one well in each permit. AC/P50 and AC/P51 are located in the proven Vulcan Sub-basin, immediately to the east of the producing Montara oil field. MEO has identified a trend of prospects and leads with some similar characteristics to Montara. The most mature of the features is the Ramble On prospect in AC/P51. The focus of the next phase of work will be to seek to further de-risk these prospects and leads as well as maturing other play types. 

Australia: AWE Limited on Friday announced spudding of Waitsia-1 appraisal in the Perth basin, Western Australia. The Waitsia-1 well will be drilled vertically to a planned total depth of 13,287 feet and is forecast to take approximately six weeks to complete. The well is designed to further test the gas potential of the Waitsia field, comprising primary targets in the deep conventional formations in the Kingia and High Cliff Sandstones. AWE is the operator of permits L1/L2 and owns 50 percent interest while Origin Energy Resources Limited holds the remaining 50 percent stake. If the results are positive, AWE may undertake a flow test of the Waitsia-1 well and the well may be completed as a production well for a potential future field development. The approved work program for the Waitsia-1 appraisal well does not include hydraulic fracture stimulation. 

Australia: Queensland government on Thursday announced release of new exploration acreages in the state, which will underpin its $1.55 billion (AUD 1.9 billion) gas industry. The government is seeking interest from around the globe in exploring for potentially-rich petroleum and gas resources of Queensland’s far south-western corner. Minister for State Development and Minister for Natural Resources and Mines Anthony Lynham said 4,247 square miles (11,000 square kilometers) in Cooper and Eromanga basins was being released for exploration expressions of interest. Apart for the two basins, one small area of highly-prospective land in the Surat Basin will also be open for exploration. The Department of Natural Resources was targeting potential explorers and investors in Europe, North America and Asia through international industry media and events. Successful tenderers will be granted a petroleum and gas Authority to Prospect exploration permit for a six-year term after meeting environmental, land access and any native title requirements. The closing date for tenders is 8 October 2015. 

Brazil: OAO Rosneft, Russia’s largest oil producer, has taken control of an exploration venture in the Brazilian Amazon, Chief Executive Officer Igor Sechin said. Rosneft will hold 100 percent of two onshore oil and natural gas exploration leases in the Amazon’s Solimoes Basin after buying a stake from PetroRio, according to two people with direct knowledge of the deal who asked not to be named because the agreement isn’t public. The deal is valued at $55 million and will be announced as early as Monday, one of the people said. The agreement puts an end to more than a year of negotiations between the Moscow-based company and the Brazilian independent oil producer over their venture in Solimoes. In March 2014, Rosneft announced a deal to boost its stake in the project to 51 percent, taking over the operation of the venture from PetroRio. The terms of the negotiation weren’t concluded, the Brazilian company said May 14 in its first-quarter earnings statement. 

China: The World Bank’s private lending arm is targeting investments in natural gas companies in China, the largest growing market for the fuel. The International Finance Corp. is investing $150 million in gas distribution company China Tian Lun Gas Holdings Ltd. about two weeks after announcing a $300 million debt-financing deal for China Gas Holdings Ltd. The IFC will probably invest in two to three other gas distributors in the nation in the “medium term,” according to Lance Crist, the IFC’s global head of oil and gas in Washington. Chinese gas demand will more than triple from 2012 to 2040 as the nation seeks to diversify away from coal to reduce air pollution, according to the Paris-based International Energy Agency. Gas will account for 11 percent of the country’s primary energy demand in 2040 from 4 percent now, the agency said in its 2014 World Energy Outlook report. Half of the funds for Tian Lun will come from the IFC’s Global Infrastructure Fund, the first Asian deal by the $1.2 billion facility aimed at infrastructure projects in developing countries, according to a statement Monday. 

China: China's Guizhou province has 1.95 trillion cubic meters (tcf) of recoverable shale gas resources,Xinhua Finance reported Monday citing a latest geological survey by local government. Guizhou has 13.54 trillion cubic meters of shale gas resources with seven potential shale gas-bearing strata. According to Xinhua Finance Guizhou would compile shale gas exploration and development plan and the provincial government has selected 17 favourable blocks for exploration. China has been increasing investment in shale gas sector in an effort to commercialise the resources. Recently, Guo Jiaofeng, a researcher with the Development Research Center of the State Council said that China's shale gas output is expected to top 5 billion cubic meters (bcm) in 2015. By 2020, the shale gas output of the country is likely to exceed 30 bcm, accounting for 15 percent of China's total gas output, Jiaofeng said earlier this week. 

China: Sanjiao-Qikou coalbed methane (CBM) block overall development plan (ODP) is expected to soon get approval from China's National Energy Administration (NEA), reported Xinhua Finance. The NEA accepted ODP of Sanjiao-Qikou block in August 2012. Beijing Orion Energy Technology and Services Co., Ltd., a subsidiary of Sino Oil and Gas Holdings Limited, in 2006 signed a product sharing contract with China National Petroleum Corporation (CNPC), holding 70 percent and 30 percent interests of the CBM block, respectively. The block is spread over 383 square km and has output potential of 500 million cubic meters per year over next four years. Chinese CBM industry is entering commercialization period from early period of industrialization,Xinhua Finance quoted Sun Maoyuan, an industry veteran in this sector, as saying. China is expected to raise subsidy to development of CBM to 0.4 yuan to 0.6 yuan per cubic meter from 0.2 yuan per cubic meter and further simplify procedure on project approval. 

India: India is looking to buy oil assets abroad, the nation's oil minister said on Friday, adding he was seeing increased engagement in the Latin American region. Minister Dharmendra Pradhan did not elaborate. India is the world's fourth-biggest oil consumer, importing four-fifths of its needs as its own output shrinks. 

Japan: Japan's JX Nippon Oil & Energy restarted its 443,000 tonnes per year naphtha cracker in Kawasaki plant, near Tokyo, on Monday following an extended repair work. The cracker, which had been shut since April 24, was originally slated to resume operations from around May 3, but the restart had been delayed. 

Norway: Suncor Energy Norge AS, operator of production licence 375, has completed drilling of appraisal well 34/4-14 S in the oil discovery 34/4-11. The discovery was proven in 2010, and is located approximately 20 kilometres northwest of the Snorre field in the North Sea. The reservoir is in the Brent and Statfjord groups and, prior to drilling of appraisal well 34/4-14 S, the expected recoverable reserves were about 7 million Sm3 of oil and 0.7 billion Sm3 of gas. The purpose of well 34/4-14 S was to delineate the discovery proven with well 34/4-11 and delineated by well 34/4-13 S. The well encountered a reservoir in the Statfjord group from the Early Jurassic Age and proved 11 metres of net sandstone of good quality. The well is dry. Data acquisition and sampling has been carried out. This well is the third exploration well in production licence 375, awarded in APA 2005. The well was drilled to a vertical depth of 4532 metres below the sea surface and was terminated in the Lunde formation from the Late Triassic Age. The well will be permanently plugged and abandoned. Well 34/4-14 S was drilled by the Borgland Dolphin drilling facility, which is now scheduled to drill wildcat well 25/10-13 S in production licence 571, operated by Suncor Energy AS. 

Norway: The Norwegian Petroleum Directorate (NPD) reported that the OMV-operated wildcat (7324/8-2) in PL537 was dry. The well was drilled about 6 km south-east of Wisting oil discovery (7324/8-1) in the Barents Sea and 310 km north of Hammerfest. Well 7324/8-2 was drilled to a vertical depth of 815m below the sea surface and was terminated in the Snadd formation from the Late Triassic Age. Water depth at the site is 394m. The well will now be permanently plugged and abandoned. Ownership of PL537: OMV (25%, operator), Idemitsu (20%), Petoro (20%), Tullow Oil (20%) and Statoil (15%).

Pakistan / Turkmenistan: Pakistan and Turkmenistan will discuss issue related to TAPI gas pipeline project next week when, Pakistani newspaper Express Tribune reported earlier this week. The topic will come up during Pakistani Prime Minister Nawaz Sharif’s visit Turkmenistan on May 20. Last year, gas companies of Turkmenistan, Afghanistan, Pakistan, and India established a company that will build, own and operate the planned 1,800-kilometer TAPI natural gas pipeline. The pipeline will export up to 33 billion cubic meters of natural gas a year from Turkmenistan to Afghanistan, Pakistan, and India over 30 years. The above four nations are currently in negotiations for the award of a multibillion-dollar contract to French energy giant Total as well as a Chinese and a Russian firm, Express Tribune reported. Pakistan wants work on the project to start as swiftly as possible as the country wants to augment gas supplies in the economy. The country has been facing severe shortage of natural gas which has affected power generation and other industrial activities. 

Thailand: Thailand's PTT Pcl expects to list its oil refining unit Star Petroleum Refining Co (SPRC) in late 2015, PTT's Chief Executive said on Monday. PTT was working on the listing procedure for the unit, Pailin Chuchottaworn told reporters. He gave no other details. The initial public offering was previously slated for the second quarter of 2015. 

Ukraine / Russia: Ukraine's state-run gas company Naftogaz has transferred $32 million to Russia's gas monopoly Gazprom as a further pre-payment for gas deliveries, a spokeswoman for the company said on Monday. In April, Ukraine signed an interim deal for cheaper supplies of gas from Russia for the next three months, providing breathing space for both sides in a protracted wrangle over pricing. Since the beginning of May, Naftogaz has paid a total of $102 million in pre-payments to Gazprom, including the $32 million which was announced on Monday and $30 million last week. 

USA: Gasoline surged to the highest level since November as a rally in the oil market increased costs at the pump ahead of the summer driving season. The average price of regular gasoline at U.S. pumps rose 21.75 cents to $2.7973 a gallon in the three weeks ended May 15, according to Lundberg Survey Inc., a Camarillo, California-based company that bases its prices on information obtained at about 2,500 filling stations. The fuel, which is 92.52 cents lower than a year ago, climbed to the highest level since the Nov. 21 survey. Prices are rising after a gain of more than $15 a barrel in U.S. oil futures boosted the costs of producing fuel. A crude oil increase, as well as refinery outages, especially in California, contributed to the rise in pump prices, said Trilby Lundberg, the president of Lundberg Survey. The highest price for gasoline in the lower 48 states among the markets surveyed was in Los Angeles, at $3.95 a gallon, Lundberg said. The lowest price was in Baton Rouge, Louisiana, where customers paid an average $2.32. Regular gasoline averaged $2.86 on Long Island, New York. 

USA: CB&I announced it has been awarded a contract by NextDecade LLC, for the front end engineering and design (FEED) and engineering, procurement and construction terms related to the Rio Grande LNG export project in Brownsville, Texas. The scope of work includes all design and engineering activities required for the Federal Energy Regulatory Commission (FERC) permitting process, as well as for preparation for procurement of critical equipment prior to the final investment decision. The Rio Grande LNG project includes plans for up to six liquefaction trains, with a nominal output capacity of 4.5 million tons of LNG per train per year. 

USA: UGI Energy Services, subsidiary of UGI Corp has announced plans to build an LNG production facility in Northern Pennsylvania that will utilize Marcellus Shale gas. The LNG plant, which will include both liquefaction and local storage, is expected to be in full commercial operation by early 2017 and have the capability of producing 120,000 gallons of LNG per day. The total capital investment will be approximately $60 million. Natural gas will be supplied by UGI's Auburn gathering system. 

USA: Hundreds of activists in kayaks and small boats fanned out on a Seattle bay on Saturday to protest plans by Royal Dutch Shell to resume oil exploration in the Arctic and keep two of its drilling rigs stored in the city's port. Environmental groups have vowed to disrupt the Anglo-Dutch oil company's efforts to use the Seattle as a home base as it outfits the rigs to return to the Chukchi Sea off Alaska, saying drilling in the remote Arctic waters could lead to an ecological catastrophe. Demonstrators have planned days of protests, both on land and in Elliott Bay, home to the Port of Seattle, where the first of the two rigs docked on Thursday. Kayakers on Saturday paddled around the rig yelling "Shell No." Others unfurled a large banner that read "Climate Justice." Environmental groups contend harsh and shifting weather conditions make it impossible to drill in the Arctic, a region with a fragile environment that helps regulate the global climate because of its vast layers of sea ice. 
Energy Prices

Crude Oil ($/BBL)
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WTI: $ 59.91 +0.28%
OPEC Basket: $ 63.13 +1.02
Natural Gas ($/MMBTU)
Henry Hub: $ 3.02 +0.67%

Steel ($/MT)
Steel Billet: $ 305.00
(LME Official – 3 months Buyer)

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