In Brief.

Conoco reports minor incident NEW YORK: ConocoPhillips said it had a "minor incident" at its 285,000 barrel-per-day (bpd) Bayway oil refinery in Linden, New Jersey.

"Yesterday, we reported a minor incident at the Bayway refinery in Linden, NJ There have been no commercial or off site impacts," a spokesman told Reuters in an email. He declined to give details on how the incident affected the refinery's operations.

PetroChina starts expansion BEIJING: Asia's top oil and gas company PetroChina has started an expansion of its Liaoyang refinery in northeastern China to prepare for more oil imports from Russia, its parent CNPC said in a company newspaper. Liaoyang is the main plant in China for processing Russian oil. Liaoyang will add a hydrocracking unit with capacity of 1 million tonnes per year (tpy), a hydrorefining unit of 2 million tpy and a sulphur removing and recovering unit of 30,000 tpy, as well as other facilities including reserve tanks.

Pertamina's Dumai unit normal JAKARTA: Indonesia's state oil firm Pertamina said its 120,000 barrels per day (bpd) Dumai refinery has returned to normal operations after its crude distillation unit (CDU) was affected by a small fire. "A small fire began at the heating exchanger at the CDU this morning. We put out the fire quickly. We did not stop the CDU," said Basuki Trikora Putra, Pertamina spokesman. "The CDU is running at close to 100 percent now, after we reduced the running this morning," he added.

Yansab starts up Yanbu plant JEDDAH: Saudi Basic Industries Corp unit Yansab has started production from its petrochemical complex in Yanbu, Yansab said in a statement. The launch of Yanbu National Petrochemical Company 's (Yansab) 18.5 billion riyal complex ($4.93 billion) was delayed from a previously scheduled start up in 2008. The complex has production capacity of more than 4 million tonnes of petrochemical products annually, including ethylene, ethylene-glycol, proplene, and polyethylene, Yansab said. Sabic owns 51 per cent of Yansab.

Qatar to shut plant for work DUBAI: Qatar plans to shut the Qatargas 4 liquefied natural gas (LNG) facility for a few weeks of maintenance in October, a spokesperson at Qatargas said. Qatar is the world's largest exporter of LNG, which is gas chilled to liquid form for export.

Tepco consumes less fuel TOKYO: Tokyo Electric Power Co (Tepco) said its consumption of several thermal power fuels fell in June from a year earlier, as Japan's worst recession in decades hurts demand for electricity. Fuel oil consumption dropped 21 per cent and coal plunged by nearly half, while liquefied natural gas (LNG) edged lower, Asia's largest utility said in a statement. Its use of crude oil rose slightly in June from the year before. Japan generated 8.3 per cent less electricity year-on-year in May, the Federation of Electric Power Companies of Japan said last month, as recession led many large industrial consumers to curb production, limiting power demand.

GS Caltex shuts RFCC for glitch SEOUL: South Korea's GS Caltex shut a 93,000 barrels per day (bpd) gasoline-making residual fluid catalytic cracker (RFCC) at Yosu due to a technical problem, a company source said. The RFCC will be shut for 10 days, the source said. "A 10-day shutdown of its RFCC would mean a total production loss of around 500,000 barrels (about 60,000 tonnes) of gasoline," said another source. GS Caltex usually exports an average of just one 30,000-tonne cargo a month. "They will likely not export spot, and may have to go to a local refiner to plug the production gap," he added.

Japan power output falls again TOKYO: Japan's power output fell for the 11th straight month in June, although the 5.6 per cent annual fall was slower than the breakneck pace of decline seen earlier in the year. The utilities generated 73.52 billion kilowatt hours of electricity in June, the Federation of Electric Power Companies of Japan said. Electricity demand among large manufacturers in particular has taken a hit as the global financial crisis has wrecked export markets and forced them to curb production, leading to Japan's worst recession in decades. But the pace of decline has slowed with output falling by its lowest amount since December, when it was down by 4.9 per cent, and much lower than February, when electricity generation plunged 15.8 per cent for its biggest decline on record.

Kepco issues price guidance HONG KONG: Korea Electric Power (Kepco) will sell five-year dollar bonds at a yield of around 362.5 basis points over US Treasuries, two sources close to the deal said. It has hired four banks for the transaction which is likely to raise around $500 million. The power utility appointed Morgan Stanley, Goldman Sachs, HSBC and Royal Bank of Scotland for the debt offering, which is expected to be priced during New York time, the source said.

Kogas, Mitsubishi sign MOU SEOUL: State-run Korea Gas Corp (Kogas) said it has signed a memorandum of understanding (MOU) with Japan's Mitsubishi Corp to jointly study gas deals and procurements. Under this agreement, Kogas, South Korea's largest importer and sole wholesaler of liquefied natural gas (LNG), and Mitsubishi, Japan's largest trading house, will review LNG plant stake acquisitions in Australia and Canada. Kogas said in a statement that the two firm would conduct feasibility studies over LNG and petrochemical projects in Vladivostok in Russia, Krueng Mane PSC in Indonesia, and gas field development in Venezuela. Kogas, which imports gas from South Africa, the Middle East, Australia, Africa and Russia, said in April the firm would focus on exploration and production projects by investing more than 200 billion won ($157.7 million) "every year for the foreseeable future."

Nippon to close Mizushima CDU TOKYO: Japan's top refiner Nippon Oil said it plans to shut the 110,000 barrels-per-day No 2 crude distillation unit (CDU) at its Mizushima refinery in western Japan to curb refining amid slow domestic demand. A company spokesman said the restart date of the CDU has not been set. The firm said last month it would halt operations of the CDU for at least a month from mid-July. The CDU may be closed until October, when maintenance is scheduled. But the company has also been considering closing the CDU as part of its plans to cut 400,000 barrels per day of CDU capacity by the end of March 2012 after its merger with Nippon Mining Holdings next year.

LG Chem buys naphtha SEOUL: South Korea's LG Chem bought 30,000 tonnes of naphtha for late August arrival at less than half the premium paid in end-June as supply of the feedstock eased on arbitrage, a trading source said. The country's largest chemical producer bought the parcel at around a $3 a tonne premium to Japan spot quotes on a cost-and-freight (C&F) basis, compared with the $7 a tonne premium that LG Chem paid last month for volumes scheduled for the same arrival period. Details of the seller of were not immediately available. "The tight supply seems to be easing, and some other Northeast Asian buyers are expected to seek their late August cargoes later this week," the source added.

Victoria Oil gets funding LONDON: Victoria Oil and Gas said it would get funding, drilling and local advisory services for its Logbaba gas field in Douala, Cameroon, from privately held Cameroon Holdings, sending its shares up 8.6 per cent. Cameroon Holdings will provide $4 million to $10 million in cash, a drilling rig and drilling crew at a discounted operating rate and will also drill the first two wells at Logbaba, the AIM-listed oil and gas explorer said. In return, Cameroon Holdings will get an average royalty payment of about 7 per cent of gross revenue over the life of the project, the UK-based company with assets in Africa and former Soviet Union said.

Nembe attack, Shell not hit LONDON: Royal Dutch Shell said there were no injuries or impact on its crude oil production from attacks on an oil pipeline in Nigeria. The trunkline attacked was in Nembe Creek in Bayelsa state, Shell confirmed. Nigerian militants sabotaged oil pipelines operated by Shell and Agip, further cutting production in Africa's biggest energy producer. Agip's parent company Eni said the attack caused a production loss of about 24,000 barrels per day.

NTPC not asked to buy RIL gas NEW DELHI: The Indian government has not directed NTPC to buy natural gas from Reliance Industries Limited (RIL) but the state-run firm has been allocated some gas from Reliance's field, junior power minister Bharatsinh Solanki said. Solanki told lawmakers in a written reply the government had allocated 2.67 million standard cubic metres of gas per day (mmscmd) from Reliance's D6 block, off the country's east coast, to NTPC. The gas allocated to NTPC would be sold at a base price of $4.2 per million British thermal units (mmBtu), but NTPC has separately gone to court saying Reliance Industries had backed out of a deal after winning a bid in 2004 to supply natural gas at $2.34 per mmBtu.

Romania to help Oltchim BUCHAREST: Romania plans to help chemical firm Oltchim acquire Petrom's petrochemicals plant by next month, Prime Minister Emil Boc was quoted as saying. Constantin Roibu, the chief executive of state-controlled Oltchim told Reuters last month his company was in talks with several banks for a 70 million euros ($100 million) loan to fund the acquisition. Many analysts say the debt-laden Oltchim faces serious problems in obtaining financing, especially during a global cash squeeze that has also reduced demand for its products. But Prime Minister Emil Boc said the government will lend a hand to the ailing company and give state guarantees for 50 million euros.

Concern over Obama move WASHINGTON: Obama administration proposals to overhaul financial derivatives could lead to higher energy costs for consumers, energy and manufacturing groups said in a letter to the nation's top futures regulator. Last month, federal regulators outlined several proposals that would make all over-the-counter (OTC) derivatives and dealers subject to regulation. "Standardised" OTC derivatives would go through clearinghouses at regulated exchanges to reduce the risk of default.

Pakistan petrol prices rise ISLAMABAD: Pakistani President Asif Ali Zardari ordered the reintroduction of a petroleum levy, to make up for revenue lost when a court order forced the government to abandon a separate new carbon tax a day before. Zardari's move is the latest twist in a tussle over fuel taxes that has seen prices raised, cut, and then raised again over the course of just over a week. It comes as Pakistani officials meet an International Monetary Fund (IMF) mission in Istanbul to discuss the country's performance under a $7.6 billion emergency IMF programme, secured in November. The IMF has said one of the important tasks of the government is to increase tax revenue.

PDVSA seeks more time CARACAS: Venezuela's state-run oil company, PDVSA, is seeking more time to pay $4.4 billion in government debt, at the same time it is seeking to restructure its obligations to service companies. Company reports show that PDVSA signed five Treasury notes last year at a rate of 1.96 per cent, due for repayment starting in July at a rate of $880 million per month. Lower energy prices due to the global economic slump have hit PDVSA, South America's largest crude exporter, hard. The economic backbone of President Hugo Chavez's plan to build a socialist society in the Opec nation, the company makes large contributions to social programs. But last year PDVSA needed about $5 billion in state assistance, according to its official records.

Seaway says oil flows reduced HOUSTON: Seaway crude oil pipeline flows have been reduced, and a possible reason is high storage levels at Cushing, Oklahoma, a company spokesman said. Shipments were 30 per cent less in June than the average for the first quarter, and July nominations remain reduced, said Rick Rainey, spokesman for Seaway operator Teppco. Rainey said the average for the first quarter was 174,000 barrels per day.

BP signs deal with Socar LONDON: UK oil major BP has signed a preliminary deal with Azerbaijan to develop oil and gas fields in the Caspian Sea, the company saidd in a statement it had signed a memorandum of understanding with Azerbaijan's state oil company Socar covering the Shafag and Asiman structures in the Caspian. The deal was signed in London, in the presence of Azeri President Ilham Aliyev, who is on a state visit to Britain, and British Prime Minister Gordon Brown. The exploration block involved covers an area of some 1100 square kilometres and has never been explored before, BP said.

Exxon to invest in making fuel NEWYORK: ExxonMobil is expected to announce a $600 million investment to produce liquid transportation fuels from algae, the New York Times said. The oil major's biofuel effort involves a partnership with Synthetic Genomics, a biotechnology company founded by the genomics pioneer Craig Venter, according to the paper. Exxon spent several years exploring various fuel alternatives, the paper said, citing Emil Jacobs, vice president for research and development at Exxon's research and engineering unit. "We literally looked at every option we could think of, with several key parameters in mind," Jacobs told the paper, adding that scale was the first.

Perenco may halt Ecuador oil QUITO: French oil company Perenco warned Ecuador that it could temporarily halt operations in the country if the government does not return the oil it confiscated from the company over unpaid taxes. Ecuador has been seizing the bulk of the company's production since March in a bid to collect more than $350 million it believes the company owes the state in windfall taxes. "The government didn't give us a choice ... Right now, we're considering suspending operations, but the government could overcome this, giving back the petroleum it confiscated," Perenco's Latin American manager Rodrigo Marquez told Reuters.

Shell may sell or shut refinery CALGARY/LONDON: Royal Dutch Shell said it is conducting a strategic review of its Montreal East refinery, which may lead to a closure or sale as the industry struggles with weak profit margins. The Anglo-Dutch oil major will decide in the coming months the future of the 130,000 barrel per day crude processing facility, which could also result in its continued operation by Shell or conversion into a terminal, a spokesman said. Shell has been reviewing its refinery portfolio in recent years, scaling back in areas such as Europe, where it believes there will be little or no growth in demand. The Montreal East facility, one of three refineries in Quebec, employs about 500 people. It opened in 1933.

FCC unit back at planned rates NEW YORK: Valero Energy said a gasoline-producing fluidic catalytic cracking unit at its 287,000 barrel-per-day Port Arthur, Texas refinery was back at planned rates following a Friday malfunction. "Port Arthur's FCC is at planned rates," Bill Day, a spokesman for the top US refiner, told Reuters via email. Valero had cut feed to the unit following a morning malfunction, when a standpipe in the FCCU lost steam pressure, according to a notice filed that day with the Texas Commission on Environmental Quality. Day said the crude unit, FCC and hydrotreater at its 87,400 bpd Ardmore, Oklahoma refinery have not returned to production following a hydrotreater fire earlier this month.

Nigerian Chevron Q1 up 62pc LAGOS:First-quarter turnover at the Nigerian unit of Chevron rose 62 per ent to 13.89 billion naira ($95 million), the Nigerian Stock Exchange (NSE) said. The company said it made a 162.4 million naira net profit, compared to a 190.6 million naira loss in the 2008 period.

Forest Oil sees lower Q2 NEW YORK: Oil and natural gas company Forest Oil forecast sequentially lower net sales volume for its second quarter, citing reduced rig count. The company said it expects average oil and gas net sales volume of 520 million cubic feet equivalent per day (mmcfe/d), 5 per ent lower than the first quarter volume of 550 mmcfe/d.

Petkim, Akkok mull pact ISTANBUL: Turkish petrochemical firm Petkim said it has signed a memorandum of understanding on a potential co-operation to increase capacity with Istanbul-based Akkok. The two companies will evaluate opportunities to work together in the production of acrylonitrile, a component of various plastics and synthetic rubbers, according to a Petkim filing. Petkim and Akkok will also look at the possibility of converting byproducts from acrylonitrile production to create other chemicals, it said.

US refining margins slip NEW YORK: Refining margins in most regions fell last week due to weaker product prices, Credit Suisse said in a weekly report. Margins in the Northeast fell the most, off 64 cents at $4.59 a barrel in the week to July 10, while Midwest margins gave up 34 cents to $9.08 a barrel. West Coast margins fell 44 cents to $9.50 a barrel. "US refined product prices fell across the board, and as a result, refining margins were unable to benefit from the more than 10 per cent drop in crude prices," the Credit Suisse report said. Gulf Coast margins held steady at $6.77 a barrel, while margins in the Rockies gained $1.59 to $19.82 a barrel.

Indonesia eyes deals JAKARTA: Indonesia's state oil firm Pertamina said it was planning to revive oil projects it was involved in Iraq that were put on ice because of the security situation in the country. Iraq and Pertamina signed an oil exploration agreement in block 3 in Iraq's Western desert in 2002, but the US-led invasion of the Middle Eastern country prevented Pertamina from starting exploration. Pertamina said at the time it had also been eyeing the Tuba oil field in Iraq. "We used to have government-to-government projects in Tuba and the Western desert oil fields. We expect the projects to be revived," Pertamaina president Karen Agustiawan told reporters after a meeting with energy minister Purnomo Yusgiantoro.

Rabigh starts exports SINGAPORE: Saudi Arabia's oil refining and petrochemical plant, Rabigh Refining and Petrochemical (PetroRabigh) has started exporting small quantities of polymers, a Middle East based source said. PetroRabigh, an export-oriented joint venture between state oil giant Saudi Aramco and Japan's Sumitomo Chemical, started partial operations of its facilities in the fourth quarter of 2008. An ethane cracker which can produce 1.25 million tonnes per year of ethylene is running well, the source said.

Turkmenistan boosts gas ASHGABAT: Turkmenistan will increase gas sales to neighbouring Iran to 14 billion cubic metres (bcm) a year from the current 8 bcm, the central Asian country's foreign ministry said. Turkmenistan will build a new pipeline from its Dovletabad field to the Iranian border by the fourth quarter of this year which will allow it to increase exports by 6 bcm a year, the foreign ministry said in a statement. The announcement follows Turkmenistan's dispute with Russia, formerly the main buyer of its gas, but which has not been importing it since April as it sought new terms of supplies.

Iraq oil exports up DUBAI: Iraq has boosted oil exports to 2.2 mllion barrels per day (mbpd) in the first 10 days of July, a top oil official said, which if sustained would be the fastest rate since before the US-led invasion in 2003. Pressure problems at southern fields have kept Iraqi exports below a post-war high of 2.01 mbpd in May 2008. But a rapid development plan implemented earlier this year to reverse the decline was working, said Falah Alamri, head of Iraq's State Oil Marketing Organisation. "This will continue, I think the increase is sustainable," Alamri told Reuters in a telephone interview. "The crush plan has started to work."

RasGas 6 LNG in weeks DUBAI: Qatar and ExxonMobil expect to begin producing liquefied natural gas (LNG) from a new facility in Qatar within weeks, a spokesperson at LNG producer RasGas said. "We anticipate the first production of LNG to occur within the next few weeks," the spokesperson said in a statement e-mailed to Reuters. "The commissioning of train 6 is progressing normally." Qatar is the world's largest LNG exporter, and expects to double annual capacity this year to 62 million tonnes. LNG is gas super-chilled to liquid form for export in specially designed tankers. The gas is processed and chilled at facilities known as trains.

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