Questor: Signs of rejuvenation at Shell

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/07/27/cxquest127.xml

Last Updated: 9:26pm BST 27/07/2007

Royal Dutch Shell
£19.72 -42p
Questor says Hold

The sixth straight quarter in which Royal Dutch Shell profits exceeded market forecasts is more confirmation for those who believe chief executive Jeroen van der Veer’s rejuvenation of the oil major is under way.

Questor: Royal Dutch Shell

The refining and marketing side is very strong, as is the chemicals arm. Profit from the oil products division, which handles refining, leapt 42pc to a record $2.94bn. Record US gasoline prices have been driven by rising demand and refinery shutdowns.

Exploration and production profits fell 17pc, reflecting lower output and lower crude prices, but was largely expected.

Production – at 3.18m barrels of oil equivalent per day (boepd) – was down 2pc due largely to a 6pc decline in gas volumes and lost output in Nigeria.

The 2007 production forecast was maintained at 3.3m to 3.5m boepd, although it is likely to be at the lower end of that range.

Production was 3.47m a day last year, and a decline in the 2007 output would be the fifth straight drop.

Shell could give no guidance when full production would re-start in Nigeria, where rebels have kidnapped oil staff and disrupted operations.

In the long term, Shell is looking to boost production through projects such as oil sands in Canada, a gas-to-liquids plant in Qatar and, possibly, a controversial gas project in Iran.

A question is whether these will be brought up to speed at the rate Shell’s mature assets go into decline.

Acquisitions are an obvious way to rebuild its reserve base, though the Big One – a deal with BP – looks a non-starter.

Shell’s shares have risen 13pc this year, against a 5pc gain for BP, on the back of improved sentiment about the robust downstream and chemicals businesses.

There has been some profit-taking of late but yesterday’s number will continue to underpin the share price.

Russian natural gas exports fall 11.9% in H1 – ministry

http://www.interfax.ru/e/B/finances/26.html?id_issue=11800529

MOSCOW. July 30 (Interfax) – Russian natural gas exports dropped 11.9% year-on-year to 93.5 billion cubic meters in the first half of 2007, the Economic Development and Trade Ministry said in a report on the Russian economy that was distributed on Monday.

Gas exports grew 0.7% to 15.1 bcm in June 2007 compared to the same month last year.

The share of exports in total gas production fell to 28.1% in the first half of 2007 from 31.9% in the same period last year.

Gas output rose 0.1% year-on-year to 332.8 bcm in the first half of 2007. rm

No quick fix in the Gulf for Sasol/Qatar Petroleum Oryx GTL plant

http://www.mineweb.net/mineweb/view/mineweb/en/page38?oid=24114&sn=Detail

PROLONGED RAMP UP EXPECTED

After safety, Sasol is giving its Qatari Oryx gas-to-liquids plant highest priority within the group.

Author: Barry Sergeant
Posted: Thursday , 26 Jul 2007

JOHANNESBURG –

Sasol (SOL.JSE, R269 a share; SSL.NYSE, $38.44), the South African energy and chemicals group with its major coal to liquids (CTL) plant in that country, has confirmed that there is going to be no quick fix to the problems it hit with fine material in the Oryx gas-to-liquids (GTL) plant being built in Qatar. In an investor newsletter published on Thursday, Sasol said it anticipated that the capital impact of the «symptom treatment» would be small compared to the overall capital cost of the facility.

Sasol confirmed that implementing its back-up solution is expected to take until the middle of 2008. This would delay the full commissioning of the $950m Oryx joint venture (JV) project until much the same time. The plant has been producing on a restricted basis for the past four months, and shipped first product to the market in April.

At full production Oryx is set to produce around 34,000 barrels a day of natural fuels, mainly an ultra-pure diesel, as clear as water. The world has been watching progress at Oryx as it moves to full production, with Oryx seen as a global prototype of big-scale GTL in action. There are plans to expand the initial nameplate capacity of the Oryx plant to as much as 100,000 barrels of liquids a day, and yet further plans to construct an integrated GTL plant with stand alone capacity of 130,000 barrels of liquids a day.

Oryx was ceremonially opened on June 7 last year, in Ras Laffan Industrial City. The Oryx JV, in which Qatar Petroleum owns 51% and Sasol 49%, was then expected to build up to full production in 12 months or so.

Oryx, the largest GTL plant in the world, has been hit by a succession of teething problems, of which production of fines material is the latest. On Thursday Sasol said that events at Oryx were not expected to have any impact on Sasol rolling out its GTL and CTL (coal-to-liquid) technology. It said that while its intention is to achieve full capacity at Oryx as quickly and safely as possible, «our experience is that starting up technically complex and first-of-kind facilities takes time and is inherently problematic».

Sasol reminded that over the past 50-plus years its has successfully developed, implemented and operated several generations of large-scale synthetic fuel plants. Based on this experience, Sasol was fully confident that the challenges at Oryx would be overcome. Meantime, however, Sasol reminded that «a prolonged ramp-up period can be expected».

Just last week Sasol traded at all time highs, changing hands at $42.73 a share on the New York Stock Exchange.

Tanks of liquefied natural gas exploded near Dallas

http://www.latimes.com/news/nationworld/nation/la-ex-dallas25jul25,0,138347.story?coll=la-home-center

From the Associated Press
11:23 AM PDT, July 25, 2007

DALLAS — A series of explosions at a gas facility sent flaming debris raining onto highways and buildings near downtown Wednesday and injured at least three people.

Authorities evacuated a half-mile area surrounding the Southwest Industrial Gases, Inc. facility and shut down parts nearby Interstates 30 and 35 as the explosions continued for more than half an hour. Video footage showed numerous small fires burning in the area as stacks of gas cylinders exploded.

Three hours after the explosions started, fire crews were hosing down the charred metal wreckage. About a dozen cars in a parking lot and a grassy highway median were damaged.

The canisters held acetylene and propane gas, said Texas Commission on Enviornmental Quality spokeswoman Andrea Morrow. It wasn’t immediately clear what caused them begin exploding around 9:30 a.m. Calls to a phone listing for Southwest Industrial Gases weren’t answered.

«I thought it was artillery. It was just coming just boom, boom, boom,» said witness Tony Love, a former Army soldier.

At the edge of the evacuation zone is Dallas County’s main jail and criminal courts building, but operations continued there uninterrupted, said Deputy Michael Ortiz of the Dallas County Sheriff’s Department.

«We are prepared to go into any emergency mode that’s needed, but we feel pretty secure here in the jail,» Ortiz said.

The Environmental Protection Agency’s emergency responders were on the way to the scene, said Dave Bary, a spokesman for the agency’s regional office. He said they will assist in monitoring the air, but had no information yet.

Parkland Hospital spokesman Robert Behrens said two people injured by the explosions had been brought to his hospital in serious condition. A third person was taken to Methodist Dallas Medical Center, hospital spokeswoman Sandra Minatra said. She could not release his condition.

About 30 buildings near the blasts were without power and would stay that way until fire crews fully extinguished the blaze, said Carol Peters, a spokeswoman for Oncor Electric Delivery.

Vanessa O’Brien said she was standing in a parking lot a few blocks away when she felt at least 20 vibrations from the explosion.

«We felt the whole building move and the windows rattle,» she said.

PPL To Sell Its Small Natural Gas Distribution and Propane Businesses

http://money.cnn.com/news/newsfeeds/articles/prnewswire/NEM04930072007-1.htm

PR Newswire
July 30, 2007: 08:15 AM EST

ALLENTOWN, Pa., July 30 /PRNewswire-FirstCall/ — PPL Corporation on Monday (7/30) announced its intent to conduct a sales process for the company’s natural gas distribution business, PPL Gas Utilities Corporation, and propane business, Penn Fuel Propane. These businesses represented about 1 percent of PPL’s overall earnings from ongoing operations in 2006.

The gas utility serves about 77,000 natural gas distribution customers in 34 counties throughout Pennsylvania and a small area of Maryland. It operates about 3,800 miles of pipeline and owns underground gas storage capacity in three separate reservoirs in north-central Pennsylvania. The propane subsidiary buys propane on a wholesale basis and stores, delivers and sells it to about 34,000 industrial, commercial and residential customers in Pennsylvania, Delaware, Maryland and West Virginia.

«Although these businesses have been operationally and financially successful, their relative size and earnings contributions limit their strategic value to PPL’s future growth,» said William H. Spence, PPL executive vice president and chief operating officer. «We believe the capital investments necessary to maintain and expand these businesses would be better devoted to our core electricity supply and delivery businesses.»

PPL expects the sale to be completed during the second half of 2008, following the execution of a sales agreement and the receipt of all necessary regulatory approvals.

PPL is currently analyzing whether its decision to move forward with a sale of these businesses will result in a special item adjustment for the third quarter of 2007. Any special item resulting from this decision to sell these businesses would not affect PPL’s 2007 forecast of earnings from ongoing operations.

PPL has retained Lehman Brothers as its financial advisor in the sales process.

So far this year, the company has completed the sales of its electricity delivery businesses in El Salvador and Bolivia and has reached a definitive agreement to sell its telecommunications operations. In addition, PPL expects to complete the sale of its Chilean electricity delivery business by the end of 2007.

«These steps position us to focus on emerging growth opportunities in our core businesses of electricity generation, marketing and delivery — bringing the most value to our shareowners,» Spence said.

PPL Corporation , headquartered in Allentown, Pa., controls more than 11,000 megawatts of generating capacity in the United States, sells energy in key U.S. markets and delivers electricity to more than 4 million customers in Pennsylvania, the United Kingdom and Chile. More information is available at http://www.pplweb.com .

Certain statements contained in this news release, including statements with respect to future earnings impacts and business disposition, are «forward- looking statements» within the meaning of the federal securities laws. Although PPL Corporation believes that the expectations and assumptions reflected in these forward-looking statements are reasonable, these statements involve a number of risks and uncertainties, and actual results may differ materially from the results discussed in the statements. The following are among the important factors that could cause actual results to differ materially from the forward- looking statements: receipt of necessary governmental and other approvals; capital markets; and disposition proceeds. Any such forward-looking statements should be considered in light of such factors and in conjunction with PPL Corporation’s Form 10-K and other reports on file with the Securities and Exchange Commission.