Category: Oil and Gas business

It is defined as the temperature at which equal volumes of aniline and diesel oil are completely miscible. The value gives an indication of the aromatic content of diesel oil, since aniline is an aromatic compound which is dissolved on heating by the aromatics in diesel oil. The greater the aniline point, the lower the aromatics in diesel oil. A higher aniline point also indicates a higher proportion of paraffin.

The diesel index is directly related to aniline point as:
DIESEL INDEX = ((ANILINE POINT(DEG F))(API GRAVITY))/100 A higher aniline point (and therefore a lower aromatic content) in diesel oil is desirable, in order to prevent autoignition in diesel engines

Turkey obtains natural gas from 6 different sources (two pipelines from Russia, pipelines from Iran, Azerbaijan and Iraq, LNG from Nigeria and Algeria). However, it also aspires to obtain gas from Turkmenistan and wants to set up a nuclear power station over the next decade.

On July 3 2009, Algeria, Nigeria and Niger signed an intergovernmental agreement for the development of a 4,128 km gas pipeline that will send gas from the Niger Delta through Niger to Algeria’s export terminals. The project is estimated to cost around $12 billion and will supply up to 30 billion cubic meters of natural gas per year to Europe. In addition, it will enable Nigeria to increase its share of natural gas exports, while helping make Algeria one of the major energy hubs in the region, catering mainly to the European market. The European Union supports the program and considers the building of the TSGP crucial to the diversification of its energy resources. The pipeline would enable European countries to tap directly into Nigeria’s 5 trillion cubic meters of natural gas and reduce its reliance on Russia and Algeria (although Algeria’s Sonatrach and, potentially, Russia’s Gazprom will also be involved in the TSGP project). However, several doubts weigh on the building of the TSGP, despite a study carried out by Penspen and IPA Energy Consulting in 2006 that found the pipeline technically and economically feasible. First, the TSGP will be the world’s longest pipeline; much of the construction will take place in one of world’s most difficult environments, the Sahara desert, significantly raising costs. Second, developing Nigeria’s liquefied natural gas (LNG) industry would probably be a less expensive and more efficient way to export the country’s natural gas resources. Third, the TSGP is a highly speculative project and it will not be easy to find private partners willing to commit to such an unpredictable enterprise. It would take just one major incident to halt construction work and increase costs beyond profitability. The most significant obstacle to this massive project is the issue of security in the countries through which the pipeline will run. Nigeria, Niger and Algeria are among the least secure areas of the world because of the various guerrilla and terrorist movements that destabilize them; security risk, along with the speculative nature of this project, means that even a small-scale attack could seriously impair or delay the completion of the pipeline, dramatically raising costs for the companies involved. Despite the high costs and risks related to the TSGP project, the governments of Algeria, Niger and Nigeria are committed to its realization and have not expressed any doubts so far. The pipeline is considered strategic to the development of these countries’ resources, as it would enable Nigeria’s energy sources and Algeria’s southern gas fields to be duly exploited, reaching the European market. However, security threats are too significant to be ignored, undermining the economic viability of the project. Security costs are likely to be very high, as foreign and local workers will need to be protected from potential attacks. Insurance premiums are also likely to be considerable while a single successful terrorist attack could easily halt and delay construction for months, further increasing costs for the companies involved. Once completed, the pipeline will need constant patrolling and expensive surveillance systems to protect this infrastructure from potential security threats. All these factors are liable to raise costs beyond profitability for this extremely ambitious project.

With natural gas markets, especially LNG becoming increasingly globalized, a niche has opened up for service providers in the LNG industry that can offer solutions that include access to liquidity and markets, risk management, and credit and risk intermediation. Entities such as Barclays Capital LNG services aim to bring risk management expertise in liquid wholesale energy markets. Barclays Capital LNG Services will also provide entities such as Excelerate with fixed priced hedging mechanisms, allowing Excelerate to optimize pricing for natural gas buyers. Additional tailored solutions include taking physical delivery, transport and optimization of cargoes through profit sharing between the parties as well as access to liquidity and markets, risk management and credit and risk intermediation

The ability to weld onto in-service pipelines such as natural gas pipelines in which gas is actually already flowing. This makes it possible to add another section of a pipeline (hot tap branch connections) and to enable the installation of repair sleeves without interrupting the flow of gas (except for a few hours). While there are economic benefits to this practice, certain issues must be addressed to ensure that public, environmental, and worker safety is maintained both during and after welding and to ensure that the flow is indeed not interrupted for more than a number of hours and not days. The practice of welding onto in-service pipelines (hot tapping) is not uncommon.

LNG that cannot be sold potentially because of a situation where there is souring supply and diving demand or when marginal LNG suppliers compete head to head with the full cycle costs of unconventional gas producers in the US. Currently (beginning 2010), it is too early to judge the potential build up of such new gas resources. Over the next several years until 2015, it is very possible that there may be considerable distressed LNG unless liquefaction projects curtail production

Most of Libyan gas exports are done through the Greenstream pipeline to Italy, which has a capacity of 8 bcm/y. Libya uses about 2 bcm of gas for its domestic market. Most of the gas exported from Libya is priced based on crude oil and other oil products (e.g. 75% linked to Brent Crude)