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Russian agency sues to stop Shell on Sakhalin

MOSCOW – Russia’s environmental regulator said Tuesday it had filed suit seeking to revoke approval for a $20 billion international oil project led by Royal Dutch Shell on the Pacific island of Sakhalin.

The Federal Service for the Supervision of Natural Resources had signaled for several weeks that it planned to ask the Natural Resources Ministry to withdraw its approval for the Sakhalin-2 project in Russia’s Far East.

The service said in a statement that the suit was filed due to “unfulfilled recommendations, details of which are included in the state ecological review, and multiple digressions,” along with the project operators’ failure to take necessary anti-erosion measures.

Sakhalin-2 is one of two projects in Russia’s Pacific offshore being developed by Western oil companies under production-sharing agreements signed in the early 1990s, and is due to come online in 2008. The other is Exxon Mobil Corp.’s Sakhalin-1 oil project, which has state-controlled oil company OAO Rosneft as a partner.

Observers have suggested that the ministry’s attention to Sakhalin-2 is aimed at pressuring Shell to offer state-controlled gas monopoly OAO Gazprom better terms as it jostles to join what will be the world’s biggest liquefied natural gas development. ..
(5 Sept 2006)

Cost blowouts hit Woodside Petroleum

Rebecca Keenan,
WOODSIDE Petroleum’s multi-billion expansion of the North-West Shelf gas project is the latest victim of soaring industry costs, with the price tag blowing out by more than 20 per cent.

The project, Australia’s biggest resource project, was originally slated to cost $2 billion to add a fifth production train, but latest estimates put the development cost at $2.4 billion.

Woodside, which is the operator of the West Australian project, said the cost increases came from the highly inflated pricing of labour and materials. ..
(6 Sept 2006)

Ghana: Power Crisis Worries Gold Miners

Charlotte Mathews, Business Day (S.Africa)/
LAST week’s warnings from gold miners operating in Ghana that their operations could be hit by power disruptions highlighted increasing power shortages across Africa, as growing economies grapple with inadequate planning and higher energy costs. ..

Ghana’s state power utility, Volta River Authority, relies on power generated at the Volta hydroelectric power station, Aboadze thermal power station and imports from Côte d’Ivoire.

The immediate crisis is being attributed to seasonal effects on hydroelectric power. Water levels in the Volta catchment area are generally at their lowest at this time of year but are replenished this month and next. This year, rains are late. ..

The problem is exacerbated by retrofitting to Aboadze to enable it to operate on gas when the west African gas pipeline comes online late this year. That means it is now operating at less than full capacity. ..

AngloGold, Gold Fields and Golden Star said they, together with other bulk users, had been instructed by the Volta River Authority to reduce power usage 25%-50%.
(4 Sept 2006)

Turkey offers $130bn in energy investments

Turkey will offer $130bn in energy projects, including nuclear, for the private sector over coming years, to reduce the EU-applicant country’s reliance on imports, Energy Minster Hilmi Guler said yesterday. The ruling AK Party’s plans to turn Turkey into a regional energy hub by building several multi-billion-dollar transit pipelines to pump oil and gas to Europe from Central Asia.

One of the single biggest projects will be the construction of three nuclear power plants with a total 5,000MW capacity. Turkey’s previous efforts to build a nuclear power plant, stretching back 30 years, failed due to cost, legal issues and opposition from environmental groups. “Construction of the nuclear power plant will start in 2007, but I don’t want to give a specific date,” he said. The government has previously said it would begin in January 2007. “We are racing against time,” Guler said.

Oil and natural gas imports, along with coal and hydroelectric power, supply most of Turkey’s energy needs. A natural gas spat between Russia and Ukraine, Turkey’s Black Sea neighbors, along with cuts in Iranian gas exports to Turkey, highlighted Ankara’s vulnerability. Guler’s $130bn investment plan also puts emphasis on renewable energy, including hydro-electric power, solar energy, bio, wind and coal power. ..
(2 Sept 2006)