UPI Energy Watch

WASHINGTON, May 6 (UPI) -- Qatar Petroleum (QP), ExxonMobil and Italy's second largest power company, Edison, will jointly construct a natural gas terminal with a capacity of 11 billion cubic yards annually. The offshore terminal will be located near Venice, some 9 miles from the Veneto coast and scheduled to come online by the end of 2007. Norway's Aker Kvaerner will construct the LNG terminal; ExxonMobil will utilize proprietary modular tank technology to design the LNG storage tanks that will have a capacity of approximately 327,000 cubic yards. The state-of-the-art terminal will provide dependable natural gas supplies to the Italian energy sector to meet the country's growing demand. Qatar's Second Deputy Premier and Minister of Energy and Industry Abdullah bin Hamad al-Attiyah said: "The terminal is designed to provide Italy a significant additional source of natural gas, which will strengthen the country's regional and national economic competitiveness and diversify its sources of energy supply. The Isola di Porto Levante LNG project will create employment opportunities for Italy and the region, and provide a secure energy supply for continued economic growth." Stuart McGill, senior vice president of ExxonMobil, said the terminal is to be constructed and operated using the most advanced technology and employing the highest international design, construction and safety standards. Umberto Quadrino, chairman and CEO of Edison, said: "The Isola di Porto Levante will be the first Italian LNG infrastructure of this size and it represents an important milestone in the long/medium term Edison strategy."

Insurgents in Iraq launched another attack against an oil pipeline in the north resulting in the death of one policeman and four others wounded following a clash with insurgents. A statement released by the liaison office of the U.S. military and Iraqi security forces in Tikrit stated: "In oil pipeline that links northern Kirkuk oil fields to Baghdad was set ablaze after insurgents detonated an explosive improvised device under the pipeline late Wednesday near the Iraqi city of Balad, some 56 miles north of Baghdad." While firefighters rushed to the scene to put out the fire, Iraqi security forces sealed off the area. A report has stated that the suspect was also killed when police raided his house to arrest him.

Kazakhstan has purchased stakes Thursday in the amount of $900 million from British Gas in the North Caspian consortium to develop the Kashagan oil field in the northern part of the Caspian. The country projected profits from the development to reach $60 billion. Now, Kazakhstan estimates this number to increase even further. Revenue will come in the form of payments under the production sharing agreements. Kazakh Energy and Natural Resources Minister Vladimir Shkolnik said the acquisition will bring the country considerable dividends. Shkolnik said: "I announce that participating in the project and making its contribution to the operational and capital expenditures, the republic will receive an additional $10 billion over the lifespan of the project."

ChevronTexaco plans to alter the way the company distributes aid in Nigeria amid fears that the present system is stoking conflict. The company has determined that the current Nigerian aid program is inadequate, expensive, and divisive. ChevronTexaco officials have said that they discovered that handing funding directly to communities near oil installations was fuelling local tensions and creating opportunities for corruption. Over the past decade, the company has donated $129 million in aid in Nigeria. Because a company report published in local Nigerian newspapers found that they system was "inadvertently leading to or adding to the causes of conflicts among communities," ChevronTexaco is now looking to place more emphasis on working with regional councils to devise projects local people want. The report stated: "Violent, incessant inter-and-intra ethnic conflicts have left many of the development projects funded by the company destroyed, not to count the many lives and property lost." The report stated that the local officials stole funds to finance their own agenda rather than to provide healthcare or create jobs, as the company intended. Other oil companies operating in the country echoed the same problems. Royal/Dutch Shell Group, for instance, concluded that it was inadvertently contributing to the problem it was trying to solve, and it decided to phase out cash aid. Protesters have continued to target foreign oil firms, stating the companies failed to bring jobs for locals.

China's Three Gorges hydropower plant has generated 10 billion kilowatt hours of electricity in the first four months of this year. Li Yong'an, general manager of China Yangtze River Three Gorges Project Development Corporation, said Friday the project had generated 58 billion kilowatt hours since July 10, 2003, when the first generator started to produce electricity. The plant at Yangtze has 12 generators currently being installed and will have a generating capacity of 9.8 million kilowatts. The Three Gorges $21.7 billion project is expected to have 26 generators with a combined generating capacity of 18.2 million kilowatts will be able to generate 84.7 billion kilowatt hours of hydro-electric power annually when it is completed in 2009. Launched in 1993, the Three Gorges Project is designed to draw power from the Yangtze River, China's longest river. China has planned that the project be constructed in three stages. Preparations and construction in the first phase were carried out between 1993 and 1997. A total of $13.6 billion have been invested thus far.

Armenian Prime Minister Andranik Markaryan and Iranian Deputy Oil Minister Asadollah Salehi-Foruz held talks Thursday to discuss the construction of the Armenia-Iran gas pipeline in Yerevan. Markaryan and Salehi-Foruz also discussed strengthening energy cooperation between Iran and Armenia and stressed that the two countries could deepen the potential for bilateral economic relations.

Closing oil prices, May 6, 3 p.m. London

Brent crude oil: $51.66

West Texas intermediate crude oil: $50.66

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