UPDATE 1-Motiva to restart Port Arthur crude unit in early 2013

Thu, Jul 19 14:06 PM EDT * Older crude unit operating normally * New CDU is centerpiece of the expansion HOUSTON, July 19 (Reuters) - A new crude distillation unit (CDU) hit by accidental chemical corrosion last month at Motiva Enterprises' newly expanded Texas refinery is expected to restart early next year, the company said on Thursday. Motiva, a joint venture of Royal Dutch Shell and Saudi Aramco, had previously said the pitted and scarred CDU at its 600,000 barrel-per-day (bpd) refinery in Port Arthur would be shut for several months. On Thursday the company specified an expected restart of the 325,0000 bpd unit in early 2013, but declined to specify which month or quarter. "Normal operations will resume as soon as it is safely possible to do so," spokeswoman Kayla Macke said. "The target timeframe for the crude unit restart is early 2013." The refinery's older 275,000 bpd crude unit was operating normally, Motiva said, as were all seven other expansion units, though some were running at reduced rates. Those include catalytic reformer, delayed coking unit and a hydrocracker. "Motiva is working to optimize operations without the new crude unit," Macke said. Sources familiar with refinery operations told Reuters in mid-June that the unit could be shut up to a year -- more than twice as long as initial estimates -- because of extensive corrosion damage to the unit central to the plant's five-year, $10 billion expansion just five weeks after startup. Those sources also told Reuters in mid-June that corrosion found in vessels and piping within the unit prompted the shutdown. Further investigation, those sources said, showed that a few gallons of a chemical known as caustic inadvertently seeped into the new unit as workers repaired an unrelated valve leak. On Thursday Motiva said its preliminary inspection showed accidental contamination with caustic, also known as sodium hydroxide, "which resulted in cracks in stainless steel piping and other parts of the crude unit." The new CDU is the centerpiece of the expansion that pushed the plant's overall capacity to 600,000 bpd, surpassing Exxon Mobil Corp's 560,500 bpd Baytown, Texas refinery as the nation's largest. Motiva started up the new crude unit in April, and it had nearly reached full capacity by May 31, when Motiva held a commissioning ceremony near the plant featuring Shell CEO Peter Voser and Saudi Aramco CEO Khalid Al-Falih. The unit shut the following week for the valve repair, and during that time the caustic seeped into it and vaporized into a corrosive agent. Getting the crude unit back into production is expected to cost $300 million to $400 million -- about the cost of its initial construction, industry analysts say. Crude units perform the initial refining of crude oil coming into a refinery and provide feedstock for all other production units. === Saudi Aramco to invest in new energy ventures Mon, Jul 09 09:14 AM EDT DUBAI, July 9 (Reuters) - Saudi Aramco has launched an investment arm to buy into companies that have developed technologies of strategic importance to Saudi Arabia and speed their deployment in the kingdom, the state-run energy group said. Saudi Aramco Energy Ventures LLC (SAEV) plans to invest in start-up and high-growth ventures offering new technologies to the upstream and downstream oil and gas sctors, renewables, energy efficiency and water supply, the company said on Monday. "As we continue to address long-term energy challenges, SAEV will help us more effectively engage with the global community of innovators and entrepreneurs," said Khalid Al-Falih, chief executive of Aramco. The world's largest oil producer, which has been pumping close to a billion dollars worth of crude a day at times this year, gave no detail of the funds available to its investment arm. Individual investments were expected to range from $1 million to $30 million per company, SAEV said, depending on the stage of development, size of opportunity, strategic relevance to Saudi Aramco and capital intensity. "Typically we reserve around 50 percent of investment in any one company for follow-on financing," SAEV said on its website. "We seek minority equity ownership positions and in most cases seek board seats or board observer rights." The world's reliance on Saudi oil has eased due to a surge in North American oil production allowing Aramco to focus on meeting its own gas requirements. Aramco has instead been focusing over the last few years on finding enough gas to fuel a domestic industrial boom and could speed development of its own unconventional reserves by buying into North American specialist companies. Every major western oil company has either bought or teamed up with an independent North American unconventional gas pioneer over the last four years so they can quickly absorb years of knowledge gained by the smaller specialists and grab acreage in the world's biggest gas market. With Saudi Arabia struggling to find enough fresh water for its booming population, planning huge solar power plants, and already experimenting with carbon capture projects on its vast oilfields, SAEV says it is also likely to invest in cutting edge companies in these areas. (Reporting by Amena Bakr and Daniel Fineren; Editing by Mike Nesbit) ============== After Motiva glitch, no let-up yet in Saudi-U.S. oil sales Fri, Jul 06 01:38 AM EDT NEW YORK (Reuters) - Saudi Arabia maintained crude oil shipments to the United States in June near their highest level since 2008, data showed, despite a serious glitch that has crippled its newly expanded joint-venture refinery in Texas. In the four weeks to June 29, the United States imported an estimated 1.44 million barrels per day (bpd) of Saudi crude, according to calculations based on preliminary Energy Information Administration (EIA) data. That was steady with the 1.45 million bpd imported in the first four months of the year. The data runs counter to expectations that the one-third surge in Saudi shipments to the United States this year would abruptly slow after Motiva Enterprises shut its new crude unit (CDU) at the Port Arthur, Texas, refinery for up to a year after an apparent chemical leak corroded key pipes. Instead, it suggests that state oil firm Saudi Aramco either found new customers to buy crude that had been earmarked for the idled 325,000 bpd unit or pumped it into storage tanks at the plant, which has been running at less than half its full capacity since early June. However, because shipping schedules are set weeks or even months in advance, it may have been too late to redirect or resell some June cargoes, delaying the decline until July. An industry source said two weeks ago that state oil firm Saudi Aramco had halted deliveries until at least the middle of July. "The Motiva problems emerged suddenly and couldn't stop the delivery of significant volume of crude oil into the system all at once," said Ed Morse, global head of commodities research at Citigroup and a former energy expert at the State Department. "It wouldn't be surprising to see deliveries from the Kingdom to the U.S. starting to fall off in either next week's data or the data from the week after that." Motiva, co-owned by Royal Dutch Shell (RDSa.L), has said the unit suffered corrosion and could be closed for months of repairs - sources say they have told workers these could take up to a year. The unit is at the heart of a $10 billion expansion that made Port Arthur the biggest refinery in the United States. The weekly EIA figures do show that imports fell to just 1 million bpd in the week to June 22, although that was a period when Tropical Storm Debby shut the country's biggest import terminal. They rebounded to more than 1.5 million bpd in the most recent week, according to data on Thursday. Separate data from the EIA showed that Saudi crude oil shipments bound specifically for Motiva's Port Arthur refinery surged in April to nearly 375,000 bpd, up from a first-quarter average of 206,000 bpd as the company began to heat up the crude unit for operation. The extra crude bound for that plant accounted for almost the entire rise in Saudi imports in April, which reached nearly 1.6 million bpd, the highest monthly total since July 2008. First-quarter imports averaged around 1.4 million bpd. (Reporting by Jonathan Leff and Himanshu Ojha; Editing by Joseph Radford) ================ Saudi Aramco, Shell sign contract with Japan's JGC Mon, Feb 01 06:53 AM EST KHOBAR, Saudi Arabia, Feb 1 (Reuters) - State-run oil firm Saudi Aramco and Royal Dutch Shell (RDSa.L) said on Monday they signed a contract with Japan's JGC Gulf International (1963.T) to build two units at their joint refinery, in a bid to improve the refinery's environmental performance. The units will help reduce sulphur dioxide emissions to less than 250 part per million on start up, the joint company, Sasref, said in an emailed statement. This will not improve the profitability of the company, which operates a 305,000 barrels per day (bpd) crude refinery in Jubail on the Gulf coast, the company said. Aramco, Shell to start ultra-low-sulfur diesel unit in October Wed, Jul 01 10:13 AM EDT KHOBAR, Saudi Arabia (Reuters) - State-run Saudi Aramco and Royal Dutch Shell plan to start up a unit in October to produce ultra-low-sulfur diesel at their joint venture refinery in the kingdom, Aramco said on Wednesday. The unit is expected to produce about 90,000 barrels per day of ultra-low-sulfur diesel, making the refinery the kingdom's first producer that complies with new environmental standards, Aramco said in a statement. The Sasref refinery in Jubail, on the Gulf coast of Saudi Arabia, has capacity to process 305,000 barrels bpd of oil. (Reporting by Reem Shamseddine, editing by Anthony Barker) === GES+ Feb 18/ 2011 Aramco signs deals with foreign, Saudi engineers Fri, Feb 18 06:37 AM EST *Aramco says deals help create more jobs for Saudi nationals *Deals last 5 years and can be extended *Help develop in-kingdom engineering services KHOBAR, Saudi Arabia, Feb 18 (Reuters) - Saudi Aramco [SDABO.UL] said on Friday it had signed two contracts with consortiums of Saudi and foreign firms to conduct engineering work in the world's largest oil exporter. New contracts, called long-term new general engineering services plus (GES+), aim to allow local companies to enter into joint ventures with international firms and provide detailed engineering, project management and technology services. One consortium includes U.S.-based Foster Wheeler (FWLT.O). The five-year deals can be extended, the Saudi oil company said, adding that it expected to award further GES+ deals to other companies that participated in the bidding process. Detailed preliminary engineering work for Aramco's mega projects has so far been conducted by international firms outside of the world's top oil exporter, sources had said. The move is part of the state oil firm's plans to develop the domestic engineering sector as well as create more jobs for Saudi nationals, who number almost 19 million. Foreign companies had hoped the new partnerships with Saudi companies would increase their chances of winning deals with the state oil giant. [ID:nLDE62T0M0] In 2001, Aramco signed several deals for general engineering services to encourage local firms to carry out basic engineering work in the kingdom and help create more jobs for Saudi nationals. Sources had expected Aramco to award deals in July last year. For a list of consortiums that bid for the deals click on: [ID:nLDE62T0M0] (Reporting by Reem Shamseddine; editing by Jane Baird) ================ Aramco sees domestic refining capacity 3.5 mbpd in '16 Mon, Oct 24 07:29 AM EDT * Jizan refinery to process 400,000 bpd, due operational in 2016 * Domestic refining capacity now at 2.26 million bpd * Aramco talking with Vietnam, Indonesia, China on refineries By Reem Shamseddine MANAMA, Oct 24 (Reuters) - State oil giant Saudi Aramco, increasingly looking to expand in downstream activities, will raise its domestic refining output capacity to 3.5 million barrels per day (bpd) by 2016 with the start-up of new plants, an Aramco executive said on Monday. "Soon we will see additions to this picture," Mohammed al-Omair, vice president of refining and natural gas liquids (NGL) fractionation at Saudi Aramco told an industry conference, referring to the seven refineries Aramco operates, alone and with other partners. "We can see that total current in-kingdom refining capacity is 2.26 million bpd. With the addition of the three facilities, the capacity will have increased...in 2016 to almost 3.5 million bpd." Omair said the additions will come from the three refineries whose development is now under way and which will have a capacity of 400,000 bpd each. "The first is our joint venture in Jubail with Total (Satorp), it will begin commissioning in 2012. Red Sea refining in Yanbu will begin commissioning in 2014, and Jizan refinery in 2016, while each of the new refineries will be designed keeping petrochemical products such as benzene, xylene and paraxylene in mind. Sasref (Aramco-Shell Jubail refinery) is already producing benzene." The 550,000 bpd Ras Tanura refinery alone supplies more than 30 percent of the kingdom's fuel demand. Aramco is upgrading the refinery to produce cleaner fuels as part of a wider plan to meet environmental regulations. The Kingdom's domestic fuel consumption has been booming on the back of rising population and economic growth. Heavy government subsidies on fuel, making the price at the pump a fraction of what it is in the global markets, has also exacerbated the demand. Aramco also considers building three new joint venture refineries in Asia as part of plans to boost its global refining capacity by 50 percent to more than 6 million barrels per day (bpd), the chief executive of Aramco, Khalid al-Falih, said in April. Asia is Aramco's largest and fastest growing oil market. "We continue talks about expansions. I am sure it will yield results, but investments in the international (market) do take a lot of time before we get to see things happening in reality but these are part of the portfolio Saudi Aramco has as plans for the downstream investments," Omair said when asked about an update on investments in Vietnam, Indonesia and another refinery project in China. Aramco operates refineries in the United States, South Korea, Japan and in China --the Fujian refining and petrochemical company (FREP). The state-run firm plans to balance its energy portfolio by increasing exposure to downstream industries in its energy mix, while maximizing its profits from existing oil and gas streams, its chief executive said this month when signing a giant petrochemical joint venture with U.S. Dow Chemical , called Sadara. "According to a recent study by Morgan Stanley in Europe we see that many premier companies integrate their refining products, one as much as 90 percent. We too, within Aramco, are striving to do the same within the kingdom," Omair said, citing plans of Rabigh II and the Sadara project. Aramco plans to use gas liquid and refined products as feedstock in its new ventures. It is raising gas and NGL output to cater for rising domestic demand for petrochemical feedstock. ================= German conglomerate Siemens said Tuesday it would invest hundred of millions of dollars to build a factory in Saudi Arabia, which has been wooing industrial companies in a bid to diversify its economy. The factory, which would make gas turbines and rotating equipment, would begin operations 18 months after government approvals and permissions. Siemens said the factory plans follow a meeting of Siemens Chief Executive Peter Loescher, state-run Saudi Aramco's CEO Khalid Al Falih and Saudi Electricity Co CEO Ali Al Barrak. The plant is part of Saudi Arabia's push to develop its industrial base and diversify its economy away from oil, by making industrial equipment locally. ================== Foreign firms eye more Aramco engineering deals Wed, Apr 14 07:04 AM EDT * Global firms look to JVs with local firms for new deals * Contracts aim to give local firms role in big projects * 10 groups prequalified new Aramco engineering contracts By Reem Shamseddine KHOBAR, Saudi Arabia, April 14 (Reuters) - Foreign engineering firms hope new partnerships with Saudi companies will increase their chances of winning deals from state oil giant Saudi Aramco, industry sources said on Tuesday. The partnerships should give domestic Saudi firms more access to Aramco's larger projects, and increase the role of foreign firms in small and medium projects. Detailed preliminary engineering work for Aramco's mega projects has so far been conducted by international firms outside of the world's top oil exporter. "The front-end engineering and design (FEED) has never been done in-kingdom before. With the infusion of the technical capabilities of international companies, this will happen," a source from an international company said. "What used to be done outside the kingdom will be done here," he added. New contracts, called long-term new general engineering services plus (GES+), aim to allow local companies to enter into joint ventures with international firms and provide detailed engineering, project management and technology services on a larger scale. In 2001, Aramco signed several deals for general engineering services (GES) to encourage local firms to carry out basic engineering work in the kingdom and help create more jobs for Saudi nationals. MEGAPROJECTS Eventually, local engineering firms in partnerships could develop preliminary design and engineering for Aramco's megaprojects, which involve armies of tens of thousands of labourers. Foreign firms in turn would tap into small and medium projects by offering along with their local partners full engineering services. Local companies at present undertake the work on small to medium projects. "International companies are actually entering into a segment of the market which was precluded until yesterday," another source from a foreign company said. Technip (TECF.PA), Foster Wheeler (FWLT.O), WorleyParsons (WOR.AX), Jacobs Engineering Group Inc (JEC.N), KBR Inc (KBR.N), and SNC-Lavalin Group (SNC.TO) are among 10 consortiums that submitted prequalification documents to compete for GES+ contracts with local companies, a source from an international company said. The deadline for submission was in January. "We have a strategy to enter into these small to medium size projects because we want to increase our proximity in the local strength to the client ... If you want to be present in the market you must be able to cover all segments," the source said. Aramco plans to invite seven shortlised firms to bid for the GES+ contracts in the second half of April. It will then select five companies and award deals in July, the source said. Aramco would make slight savings on the costs of outsourcing the engineering work, he said. The conservative Gulf Arab state has a range of initiatives to improve Saudi participation in the private sector and lower its dependence on expatriate workers. It needs to create jobs for a rapidly growing young population. LIST OF CONSORTIUMS: -Technip, Saudi Consulting Services -Jacobs-Zamel and Turbag Consulting Engineers (ZATE) -WorleyParsons-Petrocon- -Foster Wheeler-Sofcon-Saudi Consolidated Engineering Co (SCEC) -Mustang Engineering- PI-Consult-Al-Hejailan Consultants-DAR AL-RIYADH -KBR-Abdulhadi & Al Moaibed Consulting & Design Engineers (AMCDE) -SNC-Lavalin-Zuhair Fayez Partnership Consultants -Bechtel -Fluor Corp (FLR.N) -Sinopec-Aker Kvaerner-Arabian Consulting Engineering Centre (ACEC) (Editing by Simon Webb and Sue Thomas) ============= SNC-Lavalin buys Ontario engineering firm Tue, Jun 05 11:16 AM EDT (Reuters) - SNC-Lavalin Group Inc (SNC.TO), a Canadian construction company, said it bought DBA Engineering to expand its presence in Ontario. DBA Engineering specializes in materials and pavement engineering and geotechnical and geo-environmental studies, SNC-Lavalin said in a statement. SNC-Lavalin, which is caught up in allegations of bribery and improper payments, did not disclose the terms of the deal. "DBA will also provide an additional source of expertise and enhance our service offering for major projects that we are carrying out or are targeting across Ontario," said Charles Chebl, executive vice president, SNC-Lavalin. SNC-Lavalin shares, which have lost 27 percent of their value over the last six months, were up 1 percent at C$37.44 on Tuesday on the Toronto Stock Exchange. (Reporting by Maneesha Tiwari in Bangalore; Editing by Sreejiraj Eluvangal) === Second cyber attack hits Saudi oil giant Aramco Wed Sep 5, 2012 2:2PM GMT 2 7 1 Share | Email | Print Computer systems at the Saudi oil giant Aramco have been taken offline by a computer virus only days after a similar attack. It is the second cyber attack targeting the Aramco computer network in less than a month. A ‘hacktivist’ group named the Cutting Sword of Justice has claimed responsibility for the attack on August 15 in an online forum, saying the company was the main source of income for the Saudi government. The group accused the Saudi regime of "crimes and atrocities" in several countries, including Syria and Bahrain.