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UPI: Energy Watch

By ANDREA R. MIHAILESCU
UPI Energy Correspondent

WASHINGTON (UPI)

Putin: Russia over-reliant on raw material exports

President Vladimir Putin told Russia’s most influential businessmen the country is over-reliant on raw materials and called on companies to move toward producing higher-value exports.

Putin said unprocessed raw materials accounted for a rising share of exports, increasing from 80 percent in 2000 to 85 percent in 2005.

“This tendency should worry the business community as much as it does the government,” he said. “We must learn not only to profitably export crude oil, gas, ore and timber – we need to process these natural resources within the country and export valuable, high-tech products.”

Russia would build more oil refineries along the routes of new pipelines, including one that is to bring Siberian oil, said Viktor Khristenko, energy minister. He also said Russian companies aim to acquire or build refineries in countries they supply with oil.

Khristenko told reporters after the Kremlin meeting that oil production is expected to reach 540 million metric tons per year by 2015, up from 482 million at present, and that the additional output would be refined.

Putin said setting up more value-added production and manufacturing in Russia would also yield more jobs.

The meeting was one of occasional gatherings hosted by the Kremlin and featured businessmen, known derisively in Russia as “oligarchs.” Among those who attended were the heads of state-run gas giant Gazprom and state oil group Rosneft, companies that the Kremlin has positioned to be major international energy players.

Tehran LNG project to be completed by 2010

Iran expects its billion-plus dollar liquefied natural gas project to become operation by 2010, in association with phase 12 of the South Pars project, the local Mehr News Agency reported.

Ali Kheir-Andish, director of Iran’s Liquefied Natural Gas Co., made this projection during a ceremony in which the Korean firm, Dilam, and an Iranian construction firm, Khatam-ol-Anbia Construction Headquarters, secured a $500 million contract to build the facilities for the project.

The project is expected to produce 10 million tons annually of LNG and approximately 20,000 barrels per day of liquefied petroleum gas and condensates. Iran is holding talks with several international companies for the management of the Iran LNG project.

In addition to contacts over LNG, the Iranian government is also finalizing contacts for two more LNG projects in the South Pars field.

Iran has already secured a preliminary agreement with British-Dutch venture Royal Dutch Shell and Spain’s Repsol. The third project, the Pars LNG, is being developed in partnership with Total and Petronas. The Iranian government expects both of these projects to be finalised in February.

Forging the contracts comes at a time when the United States putting pressure on international firms that are active in Iran’s oil and gas industry.

Beijing to build berths for strategic oil reserve

China Petrochemical Corp., or Sinopec, the nation’s largest oil refiner, has received permission to rebuild two small berths as one 250,000-ton berth for crude oil and oil products situated in the Zhenhai district, Ningbo city, Zhejiang province, Eastern China.

The yearly increased throughput is expected to be 7.5 million tons, according to the National Development and Reform Commission of China.

As the world’s second-largest oil consumer, the moves signals that China is looking to secure its strategic oil reserve.

The government began thinking about setting up a strategic oil reserve in 1993 and formally approved it in 2004. It is scheduled for completion in three phases within 15 years.

China’s existing strategic oil reserve is does not last beyond 21 days, comparing with 158 days in the United States, 161 days in Japan, 117 days in Germany, and 96 days in France including governmental and civil oil reserves.

Feb. 8 2007

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