Case 6:12-cv-00799-JRG Document 26-15 Filed 02/11/13 Page 1 of 9 PageID #: 1231
`
`Exhibit K
`
`

`
`Case 6:12-cv-00799-JRG Document 26-15 Filed 02/11/13 Page 2 of 9 PageID #: 1232
`
`SO 1111.e;
`
`3:11.4.301-
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`72,
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`,-11U
`Cr7'Dj.
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`1,11)!
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`ut
`
`OPTIMAL FRAC PLACEMENT
`
`ri
`
`BRIGHTER US REFINING PROSPECTS
`
`US LNG EXPORT PROJECTS COM (cid:9)
`
`ED
`
`POSTER: MODERN AC LAND RIG
`
`
`

`
`Case 6:12-cv-00799-JRG Document 26-15 Filed 02/11/13 Page 3 of 9 PageID #: 1233
`
`iGENERAL INTEREST
`
`Asia, Middle East lead modest
`recovery in global refining
`
`Warren R. True
`Chief Technology Editor—LNG/Gas Processing
`
`Leona Koottungal
`Survey Editor/News Writer
`
`Growth in world crude oil distillation capacity resumed in
`2012, if only slightly, after turning down in 2011 (0q, Dec.
`5, 2011, p. 30) following slow growth in 2010, according to
`the latest OGJ Refinery Survey.
`Again in 2012, closings and rationalizations
`dominated Western.European and North American
`refineries, as in 2010 and 2011. The two developed
`regions continued to see sales of plants and mergers
`of companies.
`Capacity decline continues to characterize coun-
`tries of the Organization for Economic Cooperation
`and Development, as they work to recover from the
`2008 global recession and, in Europe, struggle to
`manage debt crises in several countries.
`OGJ survey data show Western Europe continuing to lose
`plants, one more in 2012 after two closed in 2011; total ca-
`pacity has fallen by more than 400,000 b/cd. North Amer-
`
`ica's held in number, while capacity data even advanced,
`mostly with completion of a huge expansion at a Southeast
`Texas refinery—that almost immediately`was forced to close
`for up to a year to deal with the effects of faulty design,
`New data for Asian refineries, however, show total re-
`gional capacity grevi by more than 700,000 bkd; Middle
`Eastern refineries, with several new plants and expansions
`under way (see details below), officially remained level with
`capacities for 2011.
`For 2012, OGJ's survey data show total global
`capacity at slightly less than 89 million bkd with
`no net gain in the number of plants. That's a growth
`of more than 700,000 b/cd from 2011. '
`The 2012 figures suggest global refining capacity
`and numbers of refineries are stabilizing. For 2010,
`capacity had fallen by 175,000 b/d from 88.23 mil-
`lion b/cd; the number of refineries by seven. For
`2009, global capacity stood at 87.2 million bkd for
`661 refineries; for 2008, 85.6 million Wed for 655
`refineries.
`Fig. .1 shows the trends in operating refineries and world-
`wide capacity
`
`HOW THE WAIFS LARGEST REM
` Rank (cid:9)
`
`Jan. 1, 2013 (cid:9)
`Jan.:1,2012 (cid:9)
`
`Company
`
`Crude
`capacity, lilcd'
`
`Eu.ordvlo'r.)i Cc p
`SB•ei[ PLC,
`
`BP }PLC.
`
`,Bctroler,,s
`
`Cor
`
`Pefrc.,;4, (cid:9)
`
`- T
`
`•
`
`. (cid:9)
`
`Pctrolc:tivr,
`
`,Bttrolely,n cm
`' (cid:9)
`•
`
`4-4i; B; ResfnB‘-c..r. •
`":=.4T.C.C, Enc.
`
`•B'Pra.475-
`
`cmr_B hoiotr1:25:
`
`10
`
`13
`1
`
`23
`04
`
`32
`
`Lamest refining companies
`Table 1 lists the top 25 refining com-
`panies that own most worldwide ca-
`pacity. Table 2 lists companies whose
`plants total more than 200,000 b/cd of
`rapacity in Asia, the US, and Western
`Europe. Capacities from Tables 1 and
`2 include partial interests in refineries
`that the companies do not wholly own.
`Major changes in Table 1 positions
`since Jan. 1, 2012, are few: Chevron
`and- Phillips swapped ranks as well as
`Marathon and 0A0 LultoiL
`Other changes in capacity that ap-
`pear in Tables 1 and 2 are due to ad-
`justments in declared capacity.
`In Table 2, refineries in the lower
`tier in Asia .saw some shifting around
`mostly moving up or down a spot. S-
`Oil Corp., however, managed to move
`to No. 12 from No. 46 for 2012. For the
`US, Valero has moved into the top spot
`
`Oil & Gas Journal I Dec. 3, 2012
`
`(cid:9)
`(cid:9)
`

`
`Case 6:12-cv-00799-JRG Document 26-15 Filed 02/11/13 Page 4 of 9 PageID #: 1234
`
`GENERAL INTEREST
`
`FIG, 1
`
`Number of refineries
`
`800
`
`750
`
`700
`
`Capacity
`
`Number of refineries
`
`650
`
`2004 2005 2006 2007 2008 2009 2010 20.11 2012 2013
`
`600
`
`*As of lao. 1 of each year.
`
`WORLDWIDE REFINING*
`
`89
`88
`87
`
`86
`
`85
`
`82
`
`81
`
`80
`
`79
`
`78
`
`for company-wide capacity, pushing
`Phillips 66 to No. 2. And in Western
`Europe, Royal Dutch Shell PLC moved
`ahead of ExxonMobil to the No. 2 spot.
`Table 3 lists the world's largest re-
`fineries with a minimum capacity of
`400,000 b/cd. OGJ data show that ,S-
`Oil Corp.'s refinery in Oman, South
`Korea, moved. to No. 4 from No. 7
`in. 2011 on the strength of raising its
`crude capacity to 669,000 Wed from
`564,000 b/cd. And Marathon Petro-
`leum Co. LLC's Garyville, La., plant
`moved to No, 11 from No. 13 after
`raising its crude capacity to 522,000
`Wed from 490,000 bkd.
`Table 4 lists regional process capa-
`bilities as of Jan. 1, 2011.
`
`Asian refining growing
`In September, the US Energy Information Administration is-
`sued its latest country review for China. It noted that China
`has been increasing refining capacity, to meet strong local
`demand growth and to process a wider range of crude oils.
`ETA cited FACTS Global Energy (FGE), Honolulu, which
`projected China would be adding ,a net .5 million b/d. of Ca-
`pacity 2011-20. That pace will raise capacity countrywide to
`more than 16 million b/d.
`At mid-2012, two refiners—China Petroleum & Chemi-
`cal Corp. (Sinopec) and China National -Petroleum Corp.—
`dominated China's refining, accounting for 46% and 31%,
`respectively, of the capacity. Sinopec, said EIA, holds about
`5 million b/d of total oil processing capacity in China by
`2012 and has a large. presence in coastal and southern re-
`gions.
`CNPC also has been building refineries in southern. Chi-
`na and was to commission its 200,000-b/d Pengzhou refin-
`ery in Sichuan by late this, year.
`China National Offshore Oil Co. (CNOOC), China's
`third-largest state-owned refiner, commissioned its first re-
`finery in 2009, the 240,0.00-b/d Huizhou plant in the center
`
`of Guangdong province. Sinochem plans to commission a
`refinery in Quanzhou in southern Fujian province in 2013.
`Tinder orders from the country's National. Development
`and Reform Commission, China refining is modernizing.
`many smaller refineries, called "teapot" refineries with ca-
`pacities. that range 40,000-120,000 bid, accounting for
`about 16% of-total refinery capacity,.said.EIA.
`In 2011, the NDRC issued guidelines to eliminate refire
`eries smaller than 40,000 b/d by 2013 to encourage econo-
`mies of scale and energy efficiencies.. In response, several
`local refineries are expanding or merging with larger plants
`to avoid closing.
`Because the government restricts the feedstock:that inde7-
`pendent refineries can 'use, said ETA, these refineries tend to
`process heavy fuel oil and heavier, sour crudes.
`In October, Reuters reported that China's September
`crude runs had bit a record of 9.43 million b/d following
`start-up of new capacity earlier in the year. It cited China's
`National Bureau of Statistics; which said that in September,
`China had processed more than 284 million bbl of crude oil,
`up by 7% over year-earlier runs.
`This month, December, trial production was to have
`
`G.VOkiCtibiticaninOW416*nloatl, free of charge,thetext version of the
`!M014.vvide Refining Report 2012 tables frbm'\Vvvw„ogj:corry.„$Cr011
`oadtrt to 4!.urVeys'8( StOfistiCs," click ;!.Q0i1ubsOriber Surveys," then
`woildii40:Refitilog.":"This link also ..teattire the breyio.os.e.0iions of itfS:
`,
`to004 **A as colleCtion of other OGJ ::Su rveys f,f00.:i.-..pievibus years.
`(cid:9) may purchase Excellireadsheets of the
`Su scribe
`survey clatO:li..*epOlingan email to *ityf09pennwelf.cOriyor calling (890.
`7$2:9764: For further information,„ plOaketrnaii 11,cpotti.tiv'ai6ogjonlin0
`Writer f713} 963-623J:
`or. ;Cal! ;L'peria Keidittih'ga I, OGJ (cid:9)
`
`Ofi & Gas Journal [ Dec,. 3; 2012
`
`33
`
`d
`
`to
`at
`
`1:2
`
`(cid:9)
`

`
`Case 6:12-cv-00799-JRG Document 26-15 Filed 02/11/13 Page 5 of 9 PageID #: 1235
`
`GENERAL INTEREST
`
`COMPANIES WITH 200,00047 B/CD)1EFININ6.OAPACITY
`No of (cid:9)
`refineries (cid:9)
`
`Conigirl '" (cid:9)
`
`As132
`
`20. !.
`:Z1,
`
`8'
`9
`10
`11'
`i2:
`:
`
`We;tern Europa':
`
`:11, (cid:9)
`12 .• (cid:9)
`13. .•
`14
`• • 15
`.16. (cid:9)
`17;
`18..
`
`•
`
`21
`
`Sincjpec.
`• ChlrilNational PetroleOrn C,r o.
`• .xxonll/lolcril Corp.
`' JX Nippon Oil & E io8L,
`Royal Dutch Shel F FC
`
`Indian Oil Co...Ltd
`Reliance Petroleums
`SK IripoVatlon
`P.ertatiiihn'
`G5.caltex:.Corp,
`Chinese Petrbleirie corp.
`.
`. (cid:9)
`• Tonen/Getieral.Sekiyu..Seiaei.KK..
`I. • •
`
`•
`
`Chtyrtift,Ctirp:.•
`".:•Oorson:00.,.4o: Ltd.
`..rnrron§ni?etrochemical Co.
`iiPlinCuSfah Petroloirm Corp. Ltd,
`Refinery Co.'
`• hiy4ndei (cid:9)
`•
`•. Saudi Aranico...
`
`irrL,
`
`L.
`
`..211alero. Energ,, Corp: .
`
`•:..t.toconMobil Corp.
`'
`.8...,E3P PLC. : (cid:9)
`,.:11./1eathori Oil Con
`.40yal' Dutch Shot PLC
`• L Chevron Corp.
`.:.:.;•petrolebs he Venezuela SA
`ResourPes (Kept) (cid:9)
`••••'ilf lint. (cid:9)
`Enterprises Ll,C8
`Tesoro
`Corp`.
`.;."...:56ricien
`Aramco
`• ,:..EnCana Corp.
`
`,j
`
`Husky Energy Inc.
`
`TOtai SA ,
`Royal Dutch She I PLC
`ExxonMobil r,cre
`AgipPetroli ACA
`BP PLC :'
`Repsol YPF SA
`Turkish Petroleum (cid:9)
`PetrapluS Internationa: Idv
`...Pompania,Espanoia
`Grou[j Holdings lei
`.,. ;6FG Group (cid:9)
`—
`•;''.:0MV; AG :"..
`
`'
`N*0 Oil:
`• ••
`• (cid:9)
`.:.Stituil AS :
`, (cid:9)
``,Galp Energia SA
`:."Barns SPA .. .' (cid:9)
`zui--..L-, sr., (cid:9)
`Petroleos du 'A (cid:9)
`Vn len:5 Ener,-(,ci. (cid:9)
`
`- -
`
`dhiudes part'alintert (cid:9)
`land Taiwan), India, Indonesia, Japan, i'VJ 1,. 12 (cid:9)
`Singapore, South Kthrea‘,. Sri (cid:9)
`lucluchos Saudi Aramccis'3b (cid:9)
`refinery: 'Consists OF PDVSA's vv.inership (cid:9)
`and
`Francs, Germany, Greece, Jr, I.:,
`the 11f<;llinaitides so% stake in AS
`
`e (cid:9)
`„,„ d , (cid:9)
`
`N•Dr;, -1
`'
`,r. (cid:9)
`t, _ E
`
`,
`
`started at a new 200;000-b/d refinery built by PetroChina
`in China's southwestern province of Sichuan, according to
`media coverage in March. Sichuan's first 'major refinery; in
`
`Crude,
`capacity; Wed'
`
`3;971,000:;."
`2,675,0P.
`•:! 222,000
`1 423200
`
`1,814,566 ,
`1,240,7)00,',
`:100
`1,011,6'45
`'I /5,000
`70,000
`l3369,000
`'628,250
`608,0004
`588458'
`565;250
`' 540,000..
`A 78,000k..:. •
`
`351;785'.
`
`.
`. (cid:9)
`2,096,500
`?1D5Q,200
`2,044,000
`1.485,600
`,l243,000:
`'1,811;250 --
`,55,000: "
`'849,400
`798,475
`172,002
`058,0Cri
`50,5,0C-D
`', I 0,r,,no
`_7r ;-,`C
`jOi
`d_ ,2,0
`
`
`2,525,552
`1,718,000.
`1,562:500
`876,117
`
`the city of Pengzhou, is to p
`rocess pro-
`duction from northwest
`hina and
`Kazakhstan.
`building
`In June, CNOOC starte
`ing in the
`60,000 bid of crude process
`eastern part of the country tt
`boost its
`fledging refining and fuels-1
`arketing
`be built
`businesses. The new plant, to
`evince on
`in Taizhou City in Jiangsu pr
`
`the central eastern coast of ti e conn-
`n and is
`try, is costing about $1.6 billio
`ording
`to begin operating in 2015, ac
`edia.
`to company officials and local
`
`The investment, including 1 0 main
`
`processing facilities, would co me on
`top of an existing plant on the
`same
`t and
`site that produces mainly aspha
`fuel oil.
`ma-
`CNOOC is operating its first
`dong
`jor refinery in Huizhou, Guang
`000
`province, with a capacity of 240
`add
`bid. The state company plans to
`here
`there
`200,000 b/d of refining capacity
`around 2014.
`vest
`
`Elsewhere, CNOOC calls its inv est-
`ment in Taizhou in the eastern coas
`tal
`
`Zhejiang Province, an "integrated p et-
`rochemical project" instead of a "refin
`ery," saying it would become a key I
`bricants producer, China Energy New
`reported. It would also produce feed
`stock oil for petrochemicals, LPG, and
`fuel oil.
`Also earlier this year, in southern
`Guangdong, Venezuela Petroleos de
`Venezuela SA (PDVSA) is partnering
`with CNPC to build a 400,000-b/d
`refinery to be completed in 2015 and
`cost $8.3 billion. It is to be the first
`of three refineries Venezuela plans to
`help build in China.
`In a prepared statement, the South
`American state company said it was
`currently selling China about 600,000
`b/d. China, in turn, agreed to lend
`Venezuela about $38 billion in ex-
`change for the oil shipments.
`Also earlier this year, Total and Ku-
`wait Petroleum Corp. signed a prelimi-
`nary agreement on a refining and pet-
`rochemicals joint venture in southern
`China in partnership with Sinopec. The Zhanjiang project,
`in southern Guangdong province, consists of a 300,000-b/d
`full-conversion refinery integrated with petrochemicals and
`
`JI
`
`102,300
`39i51214
`, 6
`
`16;000
`313,000
`L'31:,075
`
`" ._10
`
`380,rt.:r0
`AAT,A.E.r.
`210,ir10 .
`
`Lii,; (cid:9)
`
`•
`
`-• •- (cid:9)
`
`• •.
`
`,r, (cid:9)
`
`34
`
`Oil & Gas journal J Dec. 3, 2012
`
`(cid:9)
`(cid:9)
`(cid:9)
`(cid:9)
`(cid:9)
`

`
`Case 6:12-cv-00799-JRG Document 26-15 Filed 02/11/13 Page 6 of 9 PageID #: 1236
`
`GENERAL INTEREST
`
`WORLIYI.ARGEST REFINERIES
`company (cid:9)
`
`• .5
`6 (cid:9)
`7 (cid:9)
`
`F,araguana Refining
`SK.:InnOation
`OS Caltektorn.i
`S-Oil Carp.'
`, i:Reliaire PetroleunLti
`'.F.mori.Mobil. Refining ,&
`RelianceithaiStriesil_td)
`& Sup L
`Arabian Oil C.o. (Saudi „E),T.oloc.
`• •saudi
`... (cid:9) 9;
`' Formosa P.etrochernicalta,
`• 10.
`..)MatatNiff FetroLeum'Co.LC
`11
`.ibtOdriMobil Refining & Sificc[i.
`12
`•
`13. A-loyensaLLC: (cid:9)
`. (cid:9) Kuwait.Nati6ha I PetroleuM Co
`.14
`15. • • Shell Eaters Petroleum-(Pte.; Ltd.
`'
`16 •
`•
`17 .. Citgo:P0oCUM Corp. (cid:9)
`Shailliederland
`19 (cid:9)
`sinopp..e... • .
`• (cid:9)
`•
`Saudi Aratdiarl.0ii (cid:9)
`.• 21. (cid:9)
`Saudi •ArattcOlObil
`
`(si);L:di (cid:9)
`
`cm)
`
`Locaten
`
`FOV:Y1,
`69t(t!, ',C711:1
`fegsu, -6cutii Kore.:
`
`larOnOtieri.1n ci IL)
`Jurblig/Pcilad twi - CI'
`•
`faminagari If-KM: (cid:9)
`Baytown, •TeY,
`RaS (cid:9)
`Ma4rac, (cid:9)
`La.
`Garyvl (cid:9)
`8aton P31_1F, (cid:9) L. (cid:9)
`•
`I r.3111111,1 ,1,
`pHn (cid:9)
`St (cid:9) Cr.
`
`1-.ro.b.3
`• .
`
`Pula (cid:9) du'.
`
`Texas City,
`(cid:9)H I I'S, H.
`Lake
`
`Fab (cid:9)
`Yanbc, u
`
`r3Lri
`
`marketing, said the Total announcement.
`The planned refining and petrochemicals effort will pro-
`cess Kuwaiti crude and produce refined products and pet-
`rochemicals.
`Also in March 2012, Sinopec said it plans to double refin-
`ing capacity at. the Luoyang refinery in central Henan prov-
`ince over the next 5-8 years to meet rising local fuel de-
`mand. The refinery has nameplate capacity of 200,000 b/d,
`but actual capacity is less as a result of crude transportation
`bottlenecks among other problems.
`Like China, India has several refinery expansion plans
`under way or envisioned.
`The World Bank's IFC, its investment unit, announced
`earlier this fall it would help finance the $480 million oil
`refinery expansion of HPCL Mittal Energy. Ltd. (HMEL),
`a joint venture between Hindustan Petroleum Corp. Ltd.,
`Mumbai, and Mittal Energy Investment Pte. Ltd., Singapore.
`The project is to increase capacity at the Guru Gobind
`Singh refinery in Punjab to 11.2 million tonnes/year (tpy)
`from 9 million tpy. Each partner holds 49% of the joint ven-
`ture; financial institutions hold the remaining 2%.
`Local media also reported that Numaligarh. Refinery Ltd.
`plans to increase capacity at its refinery in the Golaghat dis-
`trict of Assam to as much as 9 million tpy from 3 million tpy.
`In late 2011, Indian Oil Co. had announced plans to raise
`its total refining capacity to 2.46 million b/d by 2020-21
`with two new refineries and a major expansion (OGJ On-
`line, Nov. 16, 2011).
`Plans included construction of a 300,000-b/d refinery in
`the western part of the country as well as expansions in two
`phases at the 274,000-b/d Gujarat Refinery at Koyali, Va-
`dodara: to 360,000 b/d by 2016-17 and to 460,000 b/d by
`2020-21.
`Nearing completion in the meantime is the 300,000-b/d
`Paradip Refinery in Orissa (OGJ Online, Nov. 22, 2010). Last
`year, the Ministry of Petroleum and Natural Gas estimated
`
`Crude capa-
`City,
`
`the refinery would start up first-quar-
`ter next year. Indian Oil Co. has issued
`o recent update.
`Also, earlier this year, Reliance In-
`dustries Ltd. announced it had se-
`lected Technip to provide technology
`and engineering for the refinery offgas
`cracker expansion at its 1.24-million-
`Janmagar refinery and petrochem-
`ical complex in Gujarat.
`The project will increase ethylene
`capacity to more than 3.2 million tpy
`from about 1.9 million tpy and boost
`capacities of related products (OGJ
`Online, May 3, 2012).
`In March, HMEL commissioned its
`I80,000-b/d Guru Gobind Singh Re-
`finery near Bathinda in Punjab (OGJ
`Online, Mar. 29, 2012). In April, media reported that HMEL
`was considering doubling the new refinery.
`The grassroots refinery had been running crude oil since
`August 2011, but full commissioning had been delayed until
`Mar. 29 (OGJ Online, Nov. 2, 2011).
`Processing capacities include delayed coking, fluid cata-
`lytic cracking, and continuous catalytic reforming. A propyl-
`ene production plant is integrated with the refinery, which
`is connected to a crude oil terminal at Mundra, Gujaat, by a
`632-mile, 28-30-in. pipeline.
`Also in April, commodity trader Trafigura Pte. Ltd., Sin-
`gapore, announced it would invest as much as $130 million
`to earn 24% in the 120,000-b/d Cuddalore refinery under
`construction by Nagarjuna. Oil Corp. Ltd. in Tamil Nadu
`(OGJ, Dec. 6, 2010, p. 50). Trafigura said commercial opera-
`tions are to begin during first-half 2013.
`Downstream units of the refinery, 180 km south of Chen-
`nai on the Bay of Bengal, will include a fluid catalytic cracker
`and delayed coker. Other investors in the project are Nagar-
`juna Fertilizers & Chemicals Ltd., Tata Petrodyne, Uhde
`GMBH, Tamil Nadu Industrial Development Corp. Ltd., and
`Creative Projects & Contracts Pvt., Ltd.
`Finally, the year began with an announcement from Reli-
`ance Industries Ltd., Mumbai, that it would expand petro-
`chemicals production at its 1.24-million bid Jamnagar refin-
`ery. The $10-12 billion expansion with take up to 4 years,
`once all contracts are let.
`In May, Reliance let a contract to Fluor Corp. for proj-
`ect management services for the new petcoke gasification
`plant and expansion of petrochemical facilities at Jamnagar.
`Fluor's contract also covers expansion of the refinery's off-
`gas cracker and downstream petrochemical plants, a cap-
`tive power plant, and related facilities (OGJ Online, May 3,
`2012).
`Later, in May 2012, Reliance selected Technip to provide
`technology and engineering for the refinery offgas cracker
`
`36 (cid:9)
`
`Oil Gas Journal I Dec. 3, 2012
`
`(cid:9)
`

`
`Case 6:12-cv-00799-JRG Document 26-15 Filed 02/11/13 Page 7 of 9 PageID #: 1237
`
`GENERAL INTEREST
`
`REGIONAL LOOK AT WORLDWIDE REFINING OPERATIONS
`- (cid:9)
`Catalytic
`Crude (cid:9)
`Vacuum
`distillation
`cracking
`distillation (cid:9)
`
`Region
`
`No. of (cid:9)
`refineries
`
`Catalytic
`hydrotracking
`
`Catalytic
`hydrotreating
`
`Asia
`EastefrvE2'5.p.e.
`
`'North
`South Anr ,ca
`
`44 •
`
`4585:•_,
`1-.121
`,1
`
`1. 7
`
`Total (cid:9)
`
`655 (cid:9)
`
`88,963,403 (cid:9)
`
`29,171,606 (cid:9)
`
`14,602,537
`
`11,492,833 (cid:9)
`
`5,566,473
`
`O-33,626
`10,228,614
`4,243,208
`2,D47,063
`16;581,981
`1.004_1.
`470
`
`
`45,854048
`
`Table 4
`
`Coke;
`rryillloii
`tonrieVday
`
`L841
`20,450
`12,57J
`3,a10
`133,733'
`24,64C,
`12,614
`
`209,148
`
`expansion. The project will increase ethylene capacity to
`3.248 million tpy from L883 million tpy and boost capaci-
`ties of related products (OGJ Online, May 3, 2012).
`China and India are only the most active countries in the
`region in adding refining capacity but by no means the only
`ones.
`Media reports earlier this fall said Indonesia's OSO Group
`planned to build a $4.8 billion refinery in joint venture with
`State Oil Co. of the Azerbaijani Republic (SOLAR) near Ba-
`tam Island. Planned capacity is 600,000 b/d upon opening
`in 2017.
`In Vietnam, the country's official news agency said in Oc-
`tober that construction of the Nghi Son refinery, to be the
`country's largest, was likely to start before yearend in the
`central province of Thanh Hoa, 134 miles south of Hanoi.
`Investors include Petro Vietnam, Kuwait Petroleum Inter-
`national, Japan's Idernitsu Kosan Co., and Mitsui Chemicals.
`Total capital investment will approach $8 billion.
`Vietnam's only operating refinery, the 130,500-b/d Dung
`Quat refinery, sits on the country's central coast. Media re-
`ports said Vietnam has four other planned oil refineries.
`
`Asian refining losses
`While several Asian developing nations were building their
`refining capacities, others—mainly highly developed- Aus-
`tralia and Japan—were reducing their refining footprints.
`Asian media reported in July thatJX Nippon Oil & Ener-
`gy Corp., the country's largest refiner, had shut down units
`at its 240,200-b/d Mizushima-B refinery in western. Japan.
`The closure, to cover most of the rest of 2012, was in
`response to discoveries that some inspection records were
`improperly maintained. Included initially were the 95,200-
`bid No. 2 crude distillation unit and the 110,000-b/d No. 3
`crude unit.
`The company was also examining 18 of 26 LPG tanks at
`the refinery after investigation discovered false inspection
`records going back. to. 2000.
`In July, Dow Jones reported Cosmo Oil Co.'s plans per-
`manently to close the 140,000-b/d Sakaide refinery in west-
`ern Japan by July 2013. The move follows government reg-
`ulations that encourage refining capacity cuts amid falling
`local demand.
`
`In July 2010, Japan's Ministry of Economy, Trade, and
`Industry promulgated rules requiring refineries to raise,
`by March 2014, residual cracking capaci y to a designated
`percentage of overall crude capacity. The move was to force
`refiners to accommodate heavier—and therefore cheaper—
`crude oil. The new rules force oil refiners either to close ex-
`isting crude units or build new secondary units to process
`the heavy residue.
`Showa Shell Sekiyu KK had permanently closed in. Sep-
`tember 2011 its 120,000-bid Ogimachi crude unit near To-
`kyo. Idemitsn Kosan Co. will permanently close a 120,000-
`b/d crude unit at its Tokuyama refinery in western Japan in
`March 2014.
`JX Nippon announced plans in October to stop refining
`oil at its Muroran unit on Hokkaido by March 2014, Japa-
`nese business media reported.
`It said JX Nippon Oil will cut about 13% of its group's
`refining capacity, equivalent to output of 180,000 b/d. The
`company also said it might reduce group refining capacity
`by 200,000 b/d by the end of March 2014.
`In Australia, Caltex Australia Ltd. announced in July
`plans to close by mid-2014 or later its 123,000-b/d Kurnell
`refinery on Botany Bay, south .of Sydney. The company is
`converting the location into a fuels import terminal at a cost
`of about $705 million (OGJ Online, July'27, 2012).
`Combined with Shell's plans to close its 79,000-b/d Clyde
`refinery, originally set for 2013, Australian refining will lose
`about. 27% of its capacity. The two closures have sparked
`some in the country to proclaim the death of Australian re-
`fining.
`In June, Shell Australia moved up to September its clo-
`sure of the Clyde refinery. That follows the decision made
`in July 2011 to convert the plant to a fuels import terminal
`(OGJ Online, June 7, 2012).
`The state and future of Australian refining was the subject
`of analysis by FGE earlier in 2012 than Caltex's announce-
`ment.
`Using the closing of the Clyde refinery as a point of refer-
`ence, FGE said that decision alone would prompt changes
`to supply and distribution patterns in Australia. "The Aus-
`tralian refining industry has been under pressure for many
`years, but strength in the Australian dollar, higher oil prices,
`
`38 (cid:9)
`
`Oil & Gas Journal I Dec. 3, 2012
`
`

`
`Case 6:12-cv-00799-JRG Document 26-15 Filed 02/11/13 Page 8 of 9 PageID #: 1238
`
`GENERAL INTEREST
`
`lower processing of indigenous oil, and low regional refinery
`utilization rates have resulted in domestic refining being less
`attractive in comparative terms," said the analysis.
`With Clyde's closing, Australia will cement its place as
`the. "largest importer of diesel, second largest importer of jet
`fuel, and third largest importer of gasoline in Asia."
`The analysis noted that opportunities for refiners, trad-
`ers, and shippers to capture new markets in Australia would
`continue, "most [Australian] marine storage is controlled by
`the domestic refiners [which] will continue to be a funda-
`mental part of supply arrangements."
`The effect of other closures or curtailments, said FGE,
`"will depend on the specific refinery," but Caltex's Klima
`and ExxonMobil's Altona at Melbourne refineries "primarily
`supply by pipeline/truck, therefore will have minimal effect
`on marine shipments into nonrefinery ports. Closure [or]
`curtailment of other refineries will impact marine move-
`ments into nonrefinery ports."
`
`Middle East expansions
`The other global area to see refining growth is the Middle
`East, or more specifically the gulf states.
`In January, Saudi Aramco completed an agreement with
`China's Sinopec Group to build a 400,000-b/d refinery in
`Yanbu on the Red Sea.
`Under the initial agreement, Aramco holds 62.5% in the
`joint venture formed to develop the Yanbu Aramco Sinopec
`Refining Co.; Sinopec owns the rest.
`Construction of the refinery was already under way, as it
`was originally a joint venture with ConocoPhillips, which
`pulled out in. April 2010. The plant is on schedule to be
`completed by September 2014 and is estimated to cost $8-
`10 billion. The refinery will process heavy crude from Sau-
`di Arabia's Manifa oil field, under development to produce
`900,000 b/d.
`Aramco has said the new Yanhu refinery, which joins
`two existing refineries at Yanbu, will produce 90,000 b/d of
`gasoline, 263,000 b/d of ultralow sulfur diesel, and 6,300
`tonnes/day (tpd) of petcoke as well as 1,200 tpd of sulfur.
`Media reports in the region said Amtnco also plans to re-
`activate a project to expand. the Ras Tanura refinery, which
`was to add 400,000 b/d of new capacity to the existing
`550,000 b/d.
`In August, Saudi Aramco extended by 1 month the dead-
`line to bid for construction of another new refinery, this one
`in Jizan, a province CM Saudi Arabia's border with Yemen.
`Aramco projects capacity at the Jizan refinery at 400,000 b/d
`when it is completed in 2017.
`Aramco is also building the 400,000 b/d Satorp refinery
`in the eastern Saudi Arabian city of Jubail with France's To-
`tal; it is planned to start up next year.
`
`Elsewhere in the gulf, Bahrain Petroleum Co. completed
`plans to expand its 260,000-b/d refinery to 450,000 b/d.
`The plans call for an investment of $6.1 million.
`
`North America.
`Another article elsewhere in this issue reviews prospects
`specifically for US refining and finds more to be optimistic
`about than might have been believed (p. 100). But most of
`the new in the previous 12 months has been characterized
`by plants closings and consolidations.
`The main bright note for US refining came in July when
`the ETA reported that net petroleum distillate exports for
`April 2012 set a monthly record (www.eia.govitodayinener-
`gy). In fact, 2011 saw the US become a net exporter of petro-
`leum products for the first time in 62 years, it said.
`Rising distillate exports, the report said, have driven the
`US "transformation from .a net petroleum' product import-
`er to a net petroleum product exporter over the last several
`years." EIA monthly data indicated that net exports of distil-
`late fuels in April registered 981,000 b/d. The agency said it
`was the highest volume since monthly US trade data have
`been recorded.
`In the first 4 months of this year, gross distillate exports
`averaged 947,000 b/d, a 215,000-b/d (29%) increase com-
`pared with the same period in 2011. This average was sup-
`ported by an April number that was the strongest so far in
`2012 at slightly less than 1.1 million b/d, a 206,000-b/d
`(24%) increase over April. 2011.
`The April exports, said the EIA report, also represented
`the second highest monthly total ever. Sustained high levels
`of gross distillate exports were being supported by growth
`in global demand for distillate fuels, especially in developing
`economies outside the Organization for Economic Coopera-
`tion and Development, said ETA.
`But by far the biggest refining story in North America this
`year centered on the massive expansion at Motiva Enterprise
`LLC's Port Arthur, Tex., refinery.
`The 325,000-b/d, $10 billion expansion, largest at a US
`refinery in nearly 40 years and designed for feedstock flex-
`ibility, was dedicated on May 31, raising capacity to 600,000
`b/d and making it the largest US refinery (OGJ, June 11,
`2012, Newsle.tter).
`On June 9, however, the new crude distillation unit
`sprung leaks traced to massive corrosion; a fire ensued and
`the expansion was shut down. Motiva has since traced the
`problem to faulty design. The unit will not restart before the
`end of first-quarter 2013, if then.
`Motiva Enterprises is a refining and marketing joint ven-
`ture owned by affiliates of Royal Dutch Shell PLC and Saudi
`Aramco.
`Less sensational but more pervasive is the ownership
`rationalization rolling through US refining, with closings
`and sales that again this year have capped overall capacity
`growth.
`
`40 (cid:9)
`
`Oil & Gas Journal I Dec. 3, 2012
`
`

`
`Case 6:12-cv-00799-JRG Document 26-15 Filed 02/11/13 Page 9 of 9 PageID #: 1239
`
`GENERAL INTEREST
`
`In. October, Marathon Petroleum Corp. announced it
`would pay $2.5 million to buy BP PLC's 451,000-b/d Texas
`City, Tex., refinery, site of a May 2005 explosion and fire that
`killed 15 people (OGJ, Oct. 15, 2012, Newsletter).
`Sale of the high-conversion refinery is part of a strategy
`BP disclosed early last year to cut its US refining capacity by
`half (OGJ Online, Feb. I, 2011). As part of that strategy, it.
`agreed in August to sell its 251,000-b/d refinery in Carson,
`Calif., to Tesoro Corp. (OGJ Online, Aug. 13, 2012).
`In addition to the refinery, the sales agreement covers
`three intrastate NGL pipelines linked to the plant.
`Tesoro's deal to buy BP's Carson refinery near its 97,0007
`b/d Wilmington refinery south of Los Angeles is estimated
`to be worth $2.5 billion.
`BP announced early last year that it planned to focus its
`US fuels business on its refineries in Cherry Point, Wash.;
`Whiting, Ind.; and Toledo, Ohio. BP acquired the refinery in
`its 2000 takeover of ARCO.
`The sale, subject to regulatory approvals, is expected to
`close before mid-2013.
`Also in October, Connacher Oil & Gas Ltd., Calgary, said
`it had closed the sale of its 100% interest in Montana Refin-
`ing Co. to a subsidiary of Calumet Specialty Products Part-
`ners LP, Indianapolis (OGJ Online, Oct. 2, 2012).
`Aftertax proceeds, including the value of inventory and
`working-capital adjustments, was $201 million. Montana
`Refining operates a 9,500 b/d heavy-oil refinery in Great
`Falls, Mont. Processing capacities include 2,800 b/d of flu-
`
`id catalytic cracking, 1,000 b/d of catalytic reforming, and
`1,100 b/d of hydrotreating.
`In February, Hovensa LLC shut down its 350,000-b/d St.
`Croix, US Virgin Islands, refinery. The location is now an oil
`storage site. Operated by a joint venture of Hess Corp. and
`PDVSA, the refinery could not stem losses in recent years.
`The closing holds implications for supply of refined prod-
`ucts to the US East Coast, which experienced some product
`shortages in summer 2012 along with higher prices.
`In late 2011, Sunoco had announced it was dosing its
`330,000-b/d refinery in Philadelphia if it could find no buy-
`er.
`But in July, Sunoco said it had formed Philadelphia En-
`ergy Solutions with the Carlyle Group to keep the refinery
`open (OGJ, July 9, 2012, p. 25). Carlyle will be majority
`owner.
`Sunoco previously had closed its 178,000-b/d refinery
`at Marcus Hook, Pa. (OGJ Online, Feb. 28, 2012). Sunoco's
`two Philadelphia-area refineries and the nearby 185,000-b/d
`Trainer refinery, which ConocoPhillips was shutting down,
`accounted for half of East Coast refining capacity in August'
`2011, according to EIA data.
`Trainer, however, was purchased by Delta Air Lines for
`$180 million in an effort to ensure jet fuel for its eastern US
`operations (OGJ online, May 1, 2012).
`Another idle East Coast refinery—Valero Energy Corp.'s
`190,000-b/d plant in. Delaware City, Del.—was bought by
`PBF Holding Co. LLC in June 2010 and restarted in October
`2011. pi
`
`Noble Energy sees northeastern Nevada
`as potential unconventional oil play
`
`Paula Dittrick
`Senior Staff Writer
`
`Noble Energy Inc. is contempla