Special Report: Worldwide Construction Update: Survey shows cost increase, delay in completion dates

April 5, 2010
Oil & Gas Journal's semiannual Worldwide Construction Update shows a decline in construction activity compared with the previous edition of the update.

Oil & Gas Journal's semiannual Worldwide Construction Update shows a decline in construction activity compared with the previous edition of the update (OGJ, Nov. 16, 2009, p. 20).

Many companies have delayed project completion dates. Some projects are on hold. Following are details from the latest survey, which is available on line (see box ).

OGJ subscribers can download free of charge the 2010 Worldwide Construction Update tables at www.ogjonline.com: Scroll down to Additional Information, click on OGJ Subscriber Surveys, then Worldwide Construction. This link also includes previous editions of the update. To purchase spreadsheets of the survey data, please go to
www.ogj.com/resourcecenter/orc_survey.cfm or email [email protected].


BP-Husky Refining LLC will undertake a $400 million equipment upgrade at its 155,000-b/d Oregon, Ohio, refinery outside Toledo (OGJ Online, Jan. 20, 2010). Owned in equal parts by BP PLC and Husky Energy Inc., the company plans to start work later this year and complete it in 2012.

Work will replace two older catalytic reformers and a hydrogen plant with a single reformer. The new unit will increase gasoline production, upgrade existing infrastructure, and improve overall plant reliability.

The new 42,000-b/d reformer will require less energy than both the ones it replaces and operate at lower pressures resulting in higher production of gasoline and hydrogen per increment of feedstock.

Ecopetrol's Refineria de Cartagena SA has hired CB&I to provide engineering, procurement services, and construction for a new 165,000-b/d refinery adjacent to Reficar's refinery in Cartagena, Colombia. CB&I's scope of work also includes revamping the existing 80,000-b/d refinery.

CB&I's work on the refinery will include crude and vacuum distillation, fluid catalytic cracker naphtha hydrotreater, diesel hydrotreater, hydrocracker, hydrogen plant, sulfur plant, delayed coker, HF alkylation, C4 isomerization, power generation, and off sites and utilities. Completion is scheduled for 2012.

Also in Colombia, a joint venture of Foster Wheeler USA Corp. and Process Consultants Inc. will serve as consultant for the expansion of the Cartagena refinery (OGJ Online, Dec. 30, 2009).

The project will expand the refinery's capacity to 165,000 b/d from 80,000 b/d and also improve the fuel quality to meet Colombian and international environmental specifications. The goal is to complete the expansion project in the next 2 years with operations expected to start during the first half of 2013. Overall investment for the upgrade project is more than $3 billion.

The Ugandan government has let a contract to Foster Wheeler AG's global engineering and construction group for a feasibility study of a 150,000-b/d refinery, which would be Uganda's first (OGJ Online, Feb. 2, 2010).

The Foster Wheeler study will cover location and configuration of a refinery and options for oil field development, crude transportation, and evaluation of alternatives to refinery construction such as pipeline export. Completion is expected by midyear.

Ventech Engineers Inc. completed the delivery to northern Iraq of a 20,000-b/d, skid-mounted refinery that was fabricated at its Pasadena, Tex., plant and shipped in modules (OGJ Online, Feb. 24, 2010).

The equipment doubles capacity of and upgrades the KAR Oil Refining Ltd. refinery at Erbil, in Iraq's Kurdistan region. The original refinery started up in July 2009, processing 36° gravity oil from Khurmala Dome field about 40 km away and yielding kerosine, diesel, and naphtha (OGJ, July 27, 2009, Newsletter).

For the expansion, Ventech engineered, designed, and fabricated a 20,000-b/d distillation unit, 9,000-b/d naphtha hydrotreater, 6,000-b/d semiregenerative catalytic reformer, 2,500-b/d isomerization unit, 4,000-b/d diesel demercaptanization unit, 2,500-b/d kerosine demercaptanization unit, gas plant, and supporting utilities.

KAR Oil plans to start the new distillation unit and related facilities during the summer and the naphtha train—including the hydrotreater, reformer, and isomerization unit—in the fall.

State-owned Petroleum Co. of Trinidad & Tobago Ltd. (Petrotrin) said the cost of upgrading its 175,000-b/d Pointe-a-Pierre refinery has escalated to $1.3 billion from earlier projections of just $350 million (OGJ Online, Jan. 26, 2010).

Imtiaz Ali, the company's general manager of strategy and business development, said the increase was due to rising construction costs and delays in receiving certificates of environmental clearance from regulators.

Royal Dutch Shell PLC has withdrawn from talks with China Petroleum & Chemical Corp. (Sinopec) and Kuwait Petroleum Corp. (KPC) regarding possible construction of a $9 billion, 300,000-b/d refinery in China's Guongdong province (OGJ Online, Dec. 9, 2009). A Shell spokesperson told OGJ that, due to "strategic and commercial considerations, Shell has decided not to pursue the downstream opportunity currently in discussion between KPC and Sinopec."


Petrochina Jilin Petrochemical Co. awarded a contract to Lummus Technology for the license and process design of a grassroots ethylbenzene and styrene monomer (EB/SM) plant in Jilin, China. It has a design capacity of 320,000 tonnes/year and will utilize proprietary technologies provided by Lummus/UOP to minimize costs while providing exceptional reliability and product quality. The plant is expected to start up in 2011.

The Quintero LNG terminal in Quintero Bay, Chile, includes two 160,000-cu m LNG storage tanks to be completed in 2010. Photo from CB&I.

A Brazilian-Venezuelan joint venture has let a reimbursable front-end engineering design contract to Technip for a 1.3 million tonne/year ethylene plant at Jose, Venezuela (OGJ Online, Jan. 5, 2010).

The JV is Polimerica, owned 49% each by Venezuela's state-owned Pequiven and Braskem of Sao Paulo. Coramer, Caracas, and Sojitz, Tokyo, hold 1% each. Technip said FEED activities for the ethylene plant are scheduled to be completed by second-quarter 2011.

ExxonMobil Chemical has started up an expansion of its Rotterdam aromatics plant (OGJ, Oct. 1, 2007, Newsletter). The project boosted paraxylene capacity by 25% to 700,000 tpy and benzene capacity by 20% to 830,000 tpy.

The plant, owned and operated by ExxonMobil Chemical Holland BV, is now ExxonMobil's largest paraxylene production facility. The new unit uses proprietary ExxonMobil technology called PxMax.


Woodside Petroleum Ltd. awarded FEED contracts for Trains 2 and 3 for its Pluto project to Foster Wheeler, WorleyParsons, and KBR (OGJ Online, Nov. 12, 2009).

Total Woodside costs, including the dual contracts, for the FEED phase are $100-150 million (Aus.). The company has estimated final costs for the overall project at Karratha, on the Burrup Peninsula in Western Australia, at $12 billion. The company expects the FEED studies to be completed in this year's second half.

South Korea's STX Heavy Industries won a $700 million order to build an LNG terminal at the Port of Lazaro Cardenas on Mexico's west coast (OGJ, Feb. 22, 2010, p. 27). Under a joint development agreement with Mexico's Group Indi, STX will be in charge of design, construction, and trial operation of the 3.8 million tonne terminal, with construction to begin early next year and finishing in the latter half of 2014.

ExxonMobil Corp. and partners will proceed with development of the Papua New Guinea LNG project, according to an announcement in December. The integrated project—estimated to cost $15 billion—includes gas production and processing, onshore and offshore pipelines, and two LNG trains near Port Moresby with total liquefaction capacity of 6.6 million tpy.

Participating interests include affiliates of ExxonMobil (including Esso Highlands Ltd., operator, 33.2%), Oil Search Ltd. (29%), Independent Public Business Corp. (PNG government, 16.6%), Santos Ltd. (13.5%), Nippon Oil Exploration (4.7%), Mineral Resources Development Co. (PNG landowners, 2.8%), and Petromin PNG Holdings Ltd. (0.2%).

Ventech Engineers Inc. delivered a 20,000-b/d crude oil distillation tower to Iraq for KAR Oil Refining Ltd.'s refinery at Erbil.

Ras Laffan LNG Co. Ltd. 3 (RasGas 3) has started up its 7.8 million tpy Train 7 at Ras Laffan Industrial City, Qatar (OGJ Online, Feb. 24, 2010). RasGas 3 Train 7 is owned by QP (70%) and ExxonMobil Ras Laffan Ltd. (30%).

Dutch LNG terminal operator 4Gas dropped plans to construct a regasification terminal in the Port of Rotterdam after failing to reach agreements with customers on long-term supply contracts (OGJ Online, Mar. 12, 2010).

Meanwhile, Shell delayed until late 2010 the start-up of the $8 billion Qatargas 4 LNG project, with the project's first cargo possibly pushed into 2011 (OGJ Online, Nov. 25, 2009).

Natural gas

Dominion will expand its natural gas gathering, processing, and liquids facilities in West Virginia.

The Gathering Enhancement Project includes nine planned units totaling about 7,000 hp to be installed over the next 3 years in Harrison, Doddridge, Lewis, Gilmer and Kanawha counties, a 10 MMcfd processing plant in Pleasants County, a 40 MMcfd processing plant in Lewis County, and a 60,000 gpd expansion of the Hastings Extraction Plant in Wetzel County. Completion is expected by fourth-quarter 2012. Estimated project cost is $253 million.

Targa Resources Partners LP plans to expand capacity of its majority-owned Cedar Bayou Fractionators LP natural gas liquids fractionation facility at nearby Mont Belvieu, Tex. (OGJ Online, Dec. 28, 2009).

The maximum gross fractionation capacity of the facility is to be expanded to 275,000 b/d from 60,000 b/d, increasing the partnership's maximum gross NGL fractionation capacity along the Texas and Louisiana Gulf Coast to 439,000 b/d.

The expansion should be operational in the first quarter of 2011, subject to regulatory approvals, with no disruption of existing operations during construction.

Pluspetrol Peru Corp. SA, operator of Peru's Camisea natural gas project, let a $45 million contract to CB&I to supply a cryogenic natural gas processing plant in Malvinas as part of an expansion of the project (OGJ Online, Mar. 5, 2010).

CB&I will provide engineering, procurement, and modular fabrication of a plant with inlet capacity of 520 MMscfd of gas. The unit, scheduled for completion later this year, will treat gas produced from Pagoreni field and separate NGLs.

The 140,000 b/d Shell-Qatar Petroleum Pearl GTL project in Qatar will be the world's largest gas-to-liquids facility when completed by the end of the year. Photo from CB&I.

Sterling Energy Co., Denver, is looking to expand in North Dakota through its Ambrose Gas Processing LLC subsidiary in Divide County. The Ambrose Gas Plant southwest of Ambrose has operated for nearly 25 years, taking in gas from oil wells located in the Fortuna area.

The existing Ambrose Gas Plant produces 500 Mcfd of gas. The goal is to increase capacity to 3 MMcfd, says the company.

Other gas

Tenaska Energy Inc., Omaha, has let a contract to Siemens Energy for coal gasification technology at the planned Taylorville Energy Center, one of the first commercial-scale facilities of its kind in the US to use carbon capture and sequestration (OGJ Online, Nov. 9, 2009).

Siemens will provide equipment contracts and licensing agreements for four 500-Mw-class gasifiers.

The TEC, in Taylorville, Ill., will have gross generating capacity of 730 Mw, and net capacity of 500-525 Mw.

It will use a hybrid integrated gasification combined-cycle process to convert coal into synthesis gas, which in turn will be converted into methane, called substitute natural gas (SNG) by project sponsors, to fuel power generation.

Officials of Tenaska, the TEC managing partner, expect the facility to produce about 33 trillion btu of SNG/year. The facility is expected to cost $3.5 billion.


Saudi Aramco has hired Jacobs Engineering Group Inc. to develop a basic engineering package for four sulfur-recovery units, each with an expected production capacity of 1,200 tonnes/day.

The new, four-train sulfur plant will be part of the Wasit gas development program in Saudi Arabia.

Hyundai Engineering Co. Ltd. let a contract to Jacobs Engineering Group Inc. for license and design of its proprietary Superclaus technology for a desulfurization unit at a gas plant to be built in Turkmenistan (OGJ Online, Jan. 19, 2010).

HEC of South Korea will design and build the plant, which is scheduled to be operational in 2012.


PetroVietnam Gas Corp. (PV Gas) has formed a partnership with a Chevron Corp.-led consortium to construct a $1 billion pipeline that would transport natural gas from Chevron's fields in southern Vietnam to the Mekhong Delta region (OGJ Online, Mar. 16, 2010).

PV Gas agreed to hold a 51% stake in the venture, which will involve building a 398-km pipeline—246 km offshore and 152 km onshore. Other consortium participants include Mitsui Oil Exploration Co. (Moeco) and Thailand's PTT Exploration & Production PLC (PTTEP).

The pipeline will transport as much as 18.3 million cu m/day of gas from Blocks B, 48/95, and 52/97, which lie off southwestern Vietnam. PV Gas will serve as the line's operator.

The US Federal Energy Regulatory Commission has issued a certificate to Northwest Pipeline GP, a majority owned subsidiary of Williams Cos. Inc., approving construction and operation of 15.5 miles of 30-in. OD mainline loop to bring additional natural gas from Piceance basin to the hub in Opal, Wyo. (OGJ Online, Dec. 2, 2009).

The Sundance Trail Expansion will provide 150 MMcfd firm transportation capacity from the Greasewood and Meeker-White River hubs in Rio Blanco County, Colo., to the Opal hub area in Lincoln County, Wyo.

The project will also replace and enhance Northwest's compression facilities at the Vernal compressor station in Uintah County, Utah.

Canada's federal Joint Review Panel approved the Mackenzie Valley gas pipeline after considering its environmental and social effects (OGJ Online, Jan. 6, 2010).

The pipeline would extend more than 750 miles to transport Mackenzie River Delta gas to Alberta and beyond. Plans call for initial capacity of 1.2 bcfd, expandable to 1.9 bcfd.

TransCanada Corp. Chief Executive Officer Hal Kvisle estimates the regulatory delays contributed $3 billion (Can.) to the project's $16.2 billion total cost. Costs include $7.8 billion for the Mackenzie Valley mainline, $3.5 billion for the gas-gathering system, and $4.9 billion for anchor-field development (OGJ, Feb. 9, 2009, p. 54).

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