SPECIAL REPORT: Sulfur rules shaping global construction

April 16, 2007
Tightening specifications for the sulfur content of gasoline and diesel fuel are shaping global construction in the oil and gas industry.

Tightening specifications for the sulfur content of gasoline and diesel fuel are shaping global construction in the oil and gas industry.

Oil & Gas Journal’s semiannual Worldwide Construction Update shows strong activity for sulfur recovery plants and refinery hydrodesulfurization units.

The update is based on a survey of refining, petrochemical, LNG, gas processing, gas-to-liquids, sulfur recovery, and pipeline projects. Respondents include operators, engineering firms, and construction companies.

Compared with the previous edition of the update, the current survey shows a slight increase in sulfur recovery projects in engineering stages as well as a large number of plans for new and revamped hydrodesulfurization units in several locations (OGJ, Nov. 20, 2006, p. 20).

Following are examples of key projects in each category from a much larger list, details of which appear in tables available online (see box).


In January, Air Products & Chemicals Inc. brought on stream a second hydrogen production facility in Port Arthur, Tex. The facility supplies high-purity hydrogen to Valero Energy Corp.’s 250,000-b/d refinery and other Gulf Coast refiners. Air Products also plans a second hydrogen facility at Edmonton, Alta., to be completed in 2008. This will be the first commercial plant in Canada to provide hydrogen for upgrading Canadian oil sands, says the company.

Petroperu SA plans to expand its 62,000-b/cd refinery in Talara, Peru, with the addition of a 28,000-b/d distillation unit. The project also will add a 29,000-b/d vacuum unit, 20,000-b/d fluid coking unit, 11,000-b/d catalytic reformer, and 20,000-b/d mild hydrocracker. The project is to be completed in January 2012.

In Brazil, Petrobras is building a 140,000-b/d delayed coker at its 241,500-b/cd Sao Jose dos Campos refinery. Toyo Engineering is contractor for the project. Completion is due in March 2009.

Shell plans a 150,000-250,000-b/d refinery in Sarnia, Ont. Completion is scheduled for 2013.


China dominates petrochemical construction with its plans for new and expansion projects.

Jilin Chemical (JiHua) Group Corp., a subsidiary of China National Petroleum Corp., let a contract to KBR for basic design engineering for a 200,000-tonne/year (tpy) propylene plant to be built at an existing industrial site in Jilin City, China (OGJ Online, Feb. 13, 2007). JiHua will own and operate the production facility.

The plant will use KBR’s Superflex technology, a fluidized catalytic cracking process that converts low-value refinery and ethylene plant streams selectively to propylene, ethylene, and high-octane gasoline.

The unit will be the second of its kind in the world and the first commercial Superflex unit in the Asia-Pacific region, says KBR. The first commercial unit is in start-up phase for Sasol Ltd. in South Africa.

Construction of the tanks for Italy’s Adriatic LNG terminal progresses in Algeciras, Spain. Capable of storing 250,000 cu m of LNG, the tanks were floated out in November 2006 to the terminal’s site in the Adriatic Sea about 15 km off the Levante Po River. Photo from Adriatic LNG.
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Meanwhile, subsidiaries of China Chemical & Petroleum Corp. (Sinopec), ExxonMobil Corp., and Saudi Aramco jointly signed two separate contracts for a related project to triple capacity at a Fujian Province refinery (OGJ Online, Feb. 27, 2007).

The projects seek to meet China’s rapidly growing demand for oil products and petrochemicals.

One contract is for the Fujian Refining & Ethylene Joint-Venture Project, which will increase capacity to 240,000 b/d from 80,000 b/d at the refinery in Quanzhou City. The expanded refinery primarily will refine and process sour Saudi Arabian crude. The project also includes construction of an 800,000-tpy ethylene steam cracker, an 800,000-tpy polyethylene unit, a 400,000-tpy polypropylene unit, and an aromatics complex to produce 700,000 tpy of paraxylene.

Elsewhere, plastics company Borouge signed a $1.3 billion lump-sum, turnkey contract with Germany’s Linde Group and Consolidated Contractors Co. for the construction of an ethylene cracker, part of a major expansion project in Ruwais, Abu Dhabi. The 1.5 million-tpy cracker will undergird a tripling of production capacity at the facility to 2 million tpy of polyolefins. The project also includes a 752,000-tpy olefins conversion unit, two 800,000-tpy polypropylene plants, and a 540,000-tpy polyethylene plant. Completion is scheduled for 2010.


Shanghai LNG Co. Ltd. began construction at the end of January on the first phase of its terminal on Zhong Ximentang Island in China’s Zhejiang Province. The project will cost $900 million and be operational in 2009, receiving 1.1 million tpy of LNG in the first 3 years (OGJ Online, Nov. 27, 2006). Imports will rise to 3 million tpy about 2012.

In March, Qatar Petroleum and ExxonMobil Corp. announced completion of RasGas LNG Train 5 in Ras Laffan, Qatar (OGJ Online, Mar. 19, 2007). The project was completed in 29 months with a design capacity of 4.7 million tpy of LNG. It will supply gas to northern Europe. Trains 6 and 7 are under construction. These two trains, each with capacity of 7.8 million tpy of LNG, will start up in 2008 and 2009, respectively.

Planned construction of Petroperu’s Talara refinery includes several new processing units as well as expanded crude and vacuum distillation units. Project completion is due in January 2012. Photo from Petroperu.
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Peru LNG, a consortium of Hunt Oil Co., SK Corp. of South Korea, and Repsol YPF, let a $1.5 billion contract to CB&I for the engineering, procurement, and construction of a 4.45 million-tpy natural gas liquefaction plant in Pampa Malchorita. The contract represents the largest portion of the total $3.8 billion project cost. Hunt estimates that the project will take 4 years to complete.

Gas processing

The South African power company Globeleq let an engineering and project management consultancy contract to Foster Wheeler South Africa (Pty.) Ltd. for expansion of the Songo Songo Island gas processing facility in Tanzania (OGJ Online, Jan. 29, 2007). The project will double capacity to 140 MMcfd.

CDM MAX LLC is building the Grand Chenier gas processing plant in Cameron Parish, La., where several plants were damaged or destroyed by Hurricane Rita in September 2005. CDM is also the owner of the Patterson II Plant in St. Mary Parish.

The project’s first phase consists of a 300-MMcfd refrigeration facility. A 300-MMcfd cryogenic gas plant is planned for the second phase. The plant offers the same three recovery modes (dewpoint control, ethane rejection, and deep ethane plus recovery mode) as the Patterson II Plant but has a wider recovery range. The project is scheduled for completion in May and costs $15 million.

In Reynosa, Mexico, Petroleos Mexicanos (Pemex) is building LPG Plants 5 and 6, each with capacity of 200 MMcfd. To be completed in 2008, the plants use Ortloff Engineers technology. The contractors for the project are Linde BOC and ICA Fluor. Plants 3 and 4 were completed in 2006 and also have capacities of 200 MMcfd.

GTL, other gas

Syntroleum Corp. signed a joint development agreement with Kuwait Foreign Petroleum Exploration Co. to join in the development of a 50,000-b/d gas-to-liquids facility in Papua New Guinea. The plant will yield diesel and other products. It will anchor the new Konebada Petroleum Park near the capital city of Port Moresby.

In Qatar, construction began in the third quarter of 2006 on the Pearl GTL complex, which will have two 70,000-b/d trains and associated facilities. Production from the first train is to begin in 2009-10, with start-up of the second train due a year later (OGJ, Aug. 7, 2006, Newsletter). Contracts worth a total of $10 billion have been awarded.


In the US, Fluor is working with several sulfur projects in engineering stages. A project for BP in Cherry Point, Wash., will process 125 tonnes/day of sulfur from refinery acid gas. The project is to be completed in 2009. A similar project is being completed in Carson, Calif.

Other sulfur projects in the engineering stage are in China, Columbia, India, and other locations.


Falcon Gas Storage Co. Inc. plans to build a 63-mile, 24-in. gas pipeline to serve its expanded 16-bcf capacity Worsham-Steed gas storage facility in the western Barnett shale gas play near Fort Worth, Tex. The 450-MMcfd pipeline is to begin operating Sept. 1.

The pipeline will carry gas southward from the Worsham-Steed facility through Jack, Parker, and Hood counties in Texas. It will connect with two existing 36-in. gas transmission pipelines: the North Texas Pipeline, jointly owned by Enterprise Products Partners and Energy Transfer Partners, and the Atmos Energy Corp. Line X pipeline. In addition to an existing interconnection with Energy Transfer’s Old Ocean pipeline at Worsham-Steed, the new pipeline will connect to Devon Energy Corp.’s Acacia pipeline, Atmos’s Line WA, and Enterprise’s recently announced Sherman extension pipeline, which will move gas from the Barnett shale northeast to Boardwalk Pipeline Partners’ Gulf Crossing pipeline system.

Also in the US, Minnesota Pipe Line Co. received approval to construct its $300 million MinnCan pipeline, including a 304-mile, 24-in. oil pipeline from Clearbrook, in northwestern Minnesota, to refineries in Minneapolis and St. Paul. Construction will begin this summer and is expected to take 8 months. The pipeline will be fully operational in 2008 with a capacity of 60,000-165,000 b/d. Two pump stations are planned, one at the Clearbrook station and another at a midpoint pump station in Morrison County near Upsala.

Lukoil-Nizhnevolzhskneft LLC let a subsea pipeline installation contract to J. Ray McDermott SA for the Yuri Korchagin oil field pipeline project, 180 km off Russia in the Caspian Sea (OGJ, Feb. 5, 2007, Newsletter). The project consists of 36 miles of 12-in. pipe connecting the ice-resistant fixed platform No. 1 (LSP-1) to a single point mooring buoy south of Yuri Korchagin field. J. Ray will also provide design engineering, procurement, and testing of the line.

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Click here to download free of charge the 2007 Worldwide Construction Update tables. To find previous editions of this table click on OGJ Online Research Center, OGJ Subscriber Surveys, then Worldwide Construction. To purchase spreadsheets of the survey data, please go to www.ogj.com/resourcecenter/orc_survey.cfm or email [email protected].