Construction survey shows completion date delays; projects on hold

Dec. 6, 2010
Oil & Gas Journal's semiannual Worldwide Construction Update shows a decline in construction activity compared with the previous edition of the update (OGJ, Apr. 5, 2010, p. 24).
Sinopec Zhongyuan Petroleum Co.'s Puguang natural gas treating project started up in June. Pictured here are Trains 1-6 of 12. Black & Veatch was contractor on the project. Photo from Black & Veatch.

Leena Koottungal
Survey Editor/News Writer

Oil & Gas Journal's semiannual Worldwide Construction Update shows a decline in construction activity compared with the previous edition of the update (OGJ, Apr. 5, 2010, p. 24). Many companies have delayed project completion dates. Some projects are on hold. Following are details from the latest survey, which is available on OGJ Online (see box on the next page).


In July, ConocoPhillips reported the cancelation of plans to upgrade its 260,000-b/d refinery at Wilhelmshaven, Germany (OGJ Online, July 22, 2010). In November 2009,

ConocoPhillips confirmed plans to delay an upgrade at the facility. The company had planned to add a coker, hydrocracker, and hydrogen units to the refinery (OGJ, Dec. 21, 2009, p. 46).

Meanwhile, Cameroon's Ste. Nationale de Raffinage (Sonara) let an engineering, procurement, and construction management contract to Foster Wheeler AG for the first phase of a project to upgrade and modernize its 37,000-b/d hydroskimming Limbe refinery (OGJ Online, June 1, 2010).

The project includes revamp of the crude distillation unit, addition of a vacuum distillation unit, a catalytic reformer, and electric power-generation and related facilities. Foster Wheeler handled front-end engineering and design.

Algeria's state-owned Sonatrach awarded a $908 million contract to Technip to refurbish the 60,000-b/cd refinery at Algiers (OGJ Online, Sept. 24, 2010). Work on the refinery will take 38 months to complete, Sonatrach said.

The work at the refinery is part of a modernization plan that will see construction of a refinery southwest of Algiers at Tiaret. Algeria currently has four refineries with a combined capacity of about 450,000 b/cd.

SOCAR & Turcas Refinery AS, Istanbul, let a contract to a Foster Wheeler AG subsidiary for early work on a 214,000-b/sd grassroots refinery to be integrated with a petrochemical complex at Aliaga, Turkey (OGJ Online, June 21, 2010).

In addition to crude and vacuum distillation units, the refinery will have naphtha hydrotreating facilities, a 40,000-b/sd delayed coker, a 66,000-b/sd hydrocracker, kerosine and diesel hydrotreaters, LPG caustic treatment units, a 28,000-b/sd continuous catalytic reformer, a saturated gas unit, an amine and sour-water stripper, sulfur and tail-gas treatment units, and a 160,000-normal-cu-m/hr hydrogen unit.

A unit of Foster Wheeler's Global Engineering & Construction Group will handle front-end engineering design and provide the license and basic design package for the coker, which will use Foster Wheeler's SYDEC technology.

The Vietnamese government approved plans to raise capacity of the 148,000-b/sd Dung Quat refinery to 200,000 b/d (OGJ Online, Aug. 13, 2010).

Viet Nam News, published by the official Vietnam News Agency, said Deputy Prime Minister Hoang Trung Hai ratified the plan after agreement from the ministries of planning and investment, industry and trade, and construction and finance.

In October, the first LNG cargo arrived at the National Grid Grain LNG Terminal, UK, for commissioning of the Phase 3 expansion. CB&I was responsible for engineering, procurement, and construction of the expansion. Photo from CB&I.

The refinery, Vietnam's only such facility, went on stream in February 2009. State-owned Petrovietnam, through Binh Son Refining & Petrochemical Co. Ltd., took over operation of the refinery from main contractor Technip last May.


China Shenhua Coal to Liquid & Chemical Co. Ltd. has started up what the firm called the "world's first methanol-to-olefins unit to be operated on a commercial scale" in Baotou, China (OGJ Online, Sept. 30, 2010).

The plant uses the combined DMTO methanol-to-olefins technology of SYN Energy Technology Co. Ltd. and Lummus Technology. The plant is designed to produce 600,000 tonnes/year (tpy) of olefins from methanol feedstock.

SYN licensed the reactor and catalyst technology used in the plant and Lummus Technology licensed the olefins recovery technology.

Shell Eastern Petroleum Ltd. started up its ethylene cracker in Singapore (OGJ Online, Apr. 19, 2010). The cracker complex is part of the Shell Eastern Petrochemicals Complex, which consists of modifications to the existing Bukom refinery and construction of a worldscale monoethylene glycol plant on Jurong Island.

The 800,000-tpy cracker increases Singapore's ethylene capacity by 40%, said a company announcement, while also producing 450,000 tpy of propylene, 230,000 tpy of benzene, and 155,000 tpy of butadiene.

The cracker uses Lummus Technology proprietary ethylene cracking technology, and the butadiene extraction unit uses proprietary technology from BASF/Lummus Technology. CB&I, Houston, in joint venture with Toyo Engineering Corp., completed the engineering, procurement, and construction of the cracker.

Qatar Petroleum started up an ethane cracker at its Ras Laffan industrial site. It will feed the Qatofin polyethylene plant at Mesaieed that started up in November 2009 (OGJ Online, May 4, 2010).

According to Total SA, QP's 22.2% partner in the venture through Total Petrochemicals, the Ras Laffan olefin cracker is the largest based on ethane in the world and can produce 1.3 million tons/year of ethylene. Also a partner in the project is Chevron Phillips Chemical Co.

Carbon Holdings of Egypt let a project management consultancy contract to Foster Wheeler USA Corp. for a polyethylene facility at a petrochemical complex it is developing in Ain Sokhna, Egypt (OGJ Online, Oct. 19, 2010).

Dazhou Huixin Energy's 36-MMscfd LNG facility, near the city of Chengdu, started up in July. Photo from Black & Veatch.

Nameplate capacity is 1.35 million tpy. Foster Wheeler will provide technical support and consulting until financial close, expected in late 2011. The facility is due on stream in 2015.


In LNG news, China National Offshore Oil Corp. began building its fourth LNG terminal in China, in Zhuhai City in South China's Guangdong Province, state-owned Xinhua News Agency reported on its web site (OGJ Online, Oct. 22, 2010).

First-phase construction of the terminal will install receipt capacity of 3.5 million tpy of LNG and is scheduled to start up in September 2013. Included are three LNG storage tanks of undisclosed capacities, a wharf, and 291 km of pipelines. Total investment will be about $1.7 billion.

Second-phase construction will add another 3.5 million tpy by 2015 with ultimate capacity of 12 million tpy.

Uruguay state oil company Administracion Nacional de Combustibles, Alcohol y Portland has awarded Foster Wheeler AG's global engineering and construction group an engineering contract for an LNG receiving terminal to be built in Montevideo, in Uruguay's Rio de la Plata region (OGJ Online, Aug. 3, 2010). A contract value was not disclosed.

Scope of work includes technical assistance through initial phases of the development of the project, conceptual design of the terminal, and development of the invitation to bid for the role of owner and operator of the terminal. The owner-operator role, said the announcement, will include the responsibility for, among other elements, the engineering, procurement, and construction contract.

Foster Wheeler's scope also includes the supervision of the EPC contractor from detailed engineering through to start-up.

Yemen LNG started up its second LNG train (OGJ Online, Apr. 5, 2010). Combined with the first train, the Balhaf plant's nameplate capacity has now reached 6.7 million tpy.

Feed gas for the plant flows nearly 200 miles to the LNG plant on Yemen's southern coast from Block 18 in central Yemen's Marib region.

A press statement from partner Total SA (39.62%) said initial investment in the venture was about $4.5 billion. Other partners are state-owned Yemen Gas Co. (16.73%), Hunt Oil Co. (17.22%), SK Energy (9.55%), Korea Gas Corp. (6%), Hyundai Corp. (5.88%), and Yemen's General Authority for Social Security and Pensions (GASSP, 5%).

Inauguration of South America's first LNG plant took place in June (OGJ Online, June 15, 2010). At $3.8 billion, Peru LNG represents the largest investment in a single project ever made in Peru, according to the announcement by the owning consortium. The plant has a nominal capacity of 4.4 million tpy and will process 620 MMcfd of natural gas.

Four energy companies form Peru LNG: Hunt Oil Co. (US; 50%), SK Energy (South Korea; 20%), Repsol-YPF (Spain; 20%), and Marubeni Corp. (Japan; 10%). This consortium was specifically set up to develop, build, and operate Peru LNG.

Natural gas

Oneok Partners LP will build a natural gas processing plant in North Dakota, the company said. Oneok will spend $180-205 million on the 100-MMcfd Stateline I gas plant in western Williams County, ND, and related NGL infrastructure. Oneok expects Stateline I to begin operating during third-quarter 2012.

The Stateline I gas plant will join the 100-MMcfd Garden Creek plant, set to open next year, and the newly opened 100-MMcfd Grasslands plant, both in McKenzie County (OGJ, June 7, 2010, p. 52).

Another gas processing plant, Stateline II, is under consideration and would add another 100 MMcfd of capacity, if additional gas becomes available for processing.

Occidental of Elk Hills Inc. has awarded CB&I a $280 million contract for a natural gas processing plant at the Elk Hills oil and gas field in central California (OGJ Online, May 21, 2010).

CB&I will provide engineering, procurement, and construction for the 200-MMcfd gas plant, including fractionation, liquids storage, and export pipelines. In addition, CB&I's Lummus Technology sector will provide its NGL-Max recovery technology. The project is scheduled for completion in first-half 2012.

Total E&P UK Ltd. let a £500 million contract to Petrofac, London, to develop a gas processing plant on the Shetland Islands (OGJ Online, Oct. 27, 2010). Work is scheduled to begin this month with first gas expected from the project in second-quarter 2014.

Petrofac will develop the 500-MMcfd gas plant through its offshore engineering and operations unit, supported by engineering and construction. The project consists of engineering and procurement, supply, construction, commissioning, and start-up.

The plant, which will be built at Sullom Voe on the island, will process gas from Total's Laggan and Tormore fields, 125 km northwest of the Shetlands, and send residue gas to the Total-operated St. Fergus gas terminal in Aberdeenshire, Scotland.

Abu Dhabi Gas Development Co. Ltd. awarded a $1.5 billion engineering, procurement, construction, and precommissioning contract to Samsung Engineering, Seoul, for the gas complex in the 1-bcfd Shah sour-gas development about 112 miles southwest of Abu Dhabi (OGJ Online, May 3, 2010). Completion targets August 2013.

ADGDC also selected Samsung Engineering as interface manager and coordinator of the overall $10 billion Shah gas project. The project will develop onshore sour gas and condensate reservoirs whose first discovery was in 1966.

BGR Energy Systems Ltd., Andhra Pradesh, India, has awarded Mott MacDonald Group Ltd., Croydon, UK, a contract for detailed engineering and procurement of two 110-MMcfd gas plants for Akas and Al-Mansuria gas fields in Iraq (OGJ Online, Sept. 30, 2010). The announcement did not cite a value for the contract nor did Mott MacDonald disclose it.

Each gas processing plant will include gathering, gas and condensate separation, gas sweetening and regeneration, and gas dehydration and glycol regeneration. Mott MacDonald declined to disclose how much condensate the plants may produce, how it will be disposed of, or the projected start-up date for either plant. Mott MacDonald expects to complete engineering for both fields by mid-2011.

India's Oil & Natural Gas Corp. has awarded gas processing contracts worth $25 million to Larsen and Toubro Ltd., Mumbai, to expand processing capacity at ONGC's gas processing plants at Uran and Hazira (OGJ Online, Aug. 25, 2010).

The additional units at Uran, according to Larsen and Toubro, will expand processing capacity by 5 MMscfd. Among capacities to be installed are gas sweetening, LPG recovery, condensate fractionation, condensate handling, and other units.

The additional gas processing facilities project for Hazira will increase capacity by 5.6 MMscfd and include gas sweetening, gas dehydration, dewpoint depression, and other units.

Eni SPA's sulfur project at the Sannazzaro refinery started up this year. It processes 160 tonnes/day of sulfur from refinery acid gas. Siirtec Nigi was in charge of engineering and construction of the project. Photo from Siirtec Nigi.

The scope for Larsen and Toubro includes project management, residual basic design, planning and monitoring, residual process engineering, detailed engineering, procurement, supply, fabrication, manufacturing, inspection, transportation, storage, construction, installation, testing, mechanical completion, precommissioning, commissioning, performance guarantee tests, and transferring ownership to ONGC.

Other gas

Storengy UK Ltd. awarded Jacobs Engineering Group Inc. a contract to provide engineering, procurement, and construction management services for the above-ground infrastructure associated with the gas storage facility in Stublach, in the North West England ceremonial county of Cheshire. Jacobs will design and install gas compression, gas treatment facilities, a control system and utilities for the project.

The overall project at Storengy's Stublach site is expected to expand the gas storage capacity up to 400 million cu m, making the facility one of the UK's largest. Operations at the facility are slated to start in 2013 with a total investment estimated at about $500 million.

Southern Star Central Gas Pipeline began construction on its Elk City Gas storage facility expansion near Independence, Kan. The facility has a current capacity of 30,700 MMcf and will be expanded to 33,300 MMcf. Project is scheduled for completion in April 2011.


Siirtec Nigi has completed two Claus projects for Eni. The projects are in Sannazzaro de' Burgondi, Italy, and Taranto, Italy. Each project will process 160 tonnes/day of sulfur from refinery acid gas.

Siirtec has also put two sulfur projects for Eni on hold in Italy.

In Portugal, two Claus projects are under construction for Petrogal SA. The projects are being constructed in Sines and Porto with completion scheduled for second-quarter 2011.


El Paso Corp. announced Aug. 2 that the Ruby Pipeline Project has received approval from the US Federal Energy Regulatory Commission to begin construction (OGJ Online, Aug. 2, 2010). Ruby will extend 680 miles, using 42-in. OD line pipe and four compressor stations to transport natural gas from an existing supply hub at Opal, Wyo., to interconnections near Malin, Ore. Initial design capacity is 1.5 bcfd.

Ecopetrol SA incorporated a special-purpose company, Oleoducto Bicentenario de Colombia SAS, to construct and operate a 960-km, 450,000-b/d oil pipeline to move crude from the Llanos basin to the port of Covenas for export (OGJ Online, Aug. 26, 2010).

Ecopetrol estimates investment costs for the first phase of the line, from Araguaney to Banadia, and system upgrades at the port of Covenas at $1.031 billion. The total estimated cost of the project, including the line's Phase 2—Banadia to Ayacucho—and Phase 3—Ayacucho to Covenas—is $4.2 billion. Completion of the entire pipeline is expected by yearend 2012.

Abu Dhabi's privately held Dolphin Energy has expanded its gas pipeline system in the UAE after completing its 128-km, 48-in. Taweelah-Fujairah Pipeline (OGJ Online, May 7, 2010).

Abu Dhabi Oil Refining Co. let a $623 million contract to GS Engineering & Construction Corp. for a pipeline project that will connect Abu Dhabi's two refineries with various terminals in the emirate.

The engineering, procurement, construction, and commissioning contract will cover pipelines with a total length of 955 km and diameters of 10-28 in. Technip handled front-end engineering design, and Tebodin is handling project management.

Gas is flowing through the 907-km, 56-in. OD Iran Gas Trunkline 7 from Asalouyeh on the Persian Gulf to Iranshahr in the southern province of Sistan-Baluchistan, National Iranian Gas Co. reports (OGJ Online, Sept. 13, 2010).

The pipeline can transport 1.8 bcfd of gas produced in South Pars offshore gas field under design pressure of 1,305 psi, transiting four other provinces: Bushehr, Fars, Hormozgan, and southern Kerman. Flow began Aug. 23. According to NIGC, capacity is to be expanded to 2.9 bcfd.

GAIL (India) Ltd. has begun two-stage construction of a total of 182 km of natural gas pipeline in northern India. The pipeline will carry gas from a tap-off point on an existing 24-in. GAIL line at Kanapur in Uttar Pradesh to Rudrapur and Pant Nagar in Uttarakhand. It will have design capacity of 2.5 MMscfd.

The first phase of construction will involve 101 km of pipeline between Karanpur and Kashipur. Completion of the first phase is due by January 2011. The second phase will include 58 km of pipeline between Kashipur and Rudrapur-Pant Nagar and is due for completion by January 2012.

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