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Shell to Build Kitimat LNG Terminal Despite China Investment

 

Shell Canada’s plans to build Kitimat LNG terminal despite the company’s decision to invest $1 billion annually in China’s shale gas exploration, reports The Vancouver Sun.

Stephen Doolan, Shell Canada spokesman said: “The exploration and development of shale gas is expected to grow in China and Shell’s investments, largely with Pet-roChina, are reflective of that growth. However, the demand for energy in China and through-out Asia is expected to exceed domestic production. This demand for energy, coupled with the wider demand for LNG in Asia which is likely to grow by more than 80 million tonnes per annum between now and 2020, underscores Shell’s intent to continue to progress the LNG Canada project.”

Apache Canada, Kitimat LNG terminal plan developer, also stated that Shell’s investment decision wouldn’t influence Kitimat LNG plans.

“We are going to proceed with our plans,” said Andree Morier, communications adviser at Apache Canada, the lead company in the Kitimat LNG project.

Kitimat LNG will include natural gas liquefaction, LNG storage and marine on-loading facilities. Natural gas will be delivered via a pipeline lateral of approximately 14 kilometres from the Pacific Trail Pipelines, which will connect to the existing Spectra Energy Westcoast Pipeline system. The proximity of Kitimat LNG to the existing natural gas transmission infrastructure is one of the advantages of this project and ensures supply is readily accessible to the facility.

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Shell Plans USD 20 bln Investment in Indonesia’s Masela Block

International oil major Shell will invest approximately $20 billion in Masela offshore block, located the Arafura Sea, Indonesia.

According to Reuters, Indonesia’s Chief Economic Minister Hatta Rajasa said yesterday that Shell would gradually invest $20 billion between 2013 and 2019.

In December, 2011, Shell acquired a 30% participating interest in the Masela Block (Abadi project). Inpex is the operator of the project with 60% interest.

The Abadi gas field will be developed in phases and that one FLNG plant will be constructed and utilized for the annual LNG production of 2.5 million ton for the first phase development.

First production from the field is expected to begin in 2018.

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Desperate Argentina Now Seen Begging for Oil Investment

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Thursday, May 10, 2012 – by Staff Report

Argentine Vice President Amado Boudou on Tuesday urged US companies to invest in YPF, the nationalized oil company that Argentina recently expropriated from Spain’s Repsol … “We are very optimistic in terms of what is coming for the Argentine economy in general and the hydrocarbons sector specifically” Boudou said at a Conference on the Americas at the US State Department in Washington. Far from scaring off foreign investment because of the expropriation, the government of President Cristina Fernandez has set the framework for “excellent opportunities for those who want to invest in joint ventures and possibilities of joint work in the energy sector,” he said. The Cristina Fernandez administration is gambling that the discovery in May 2011 of a giant oilfield in Argentina’s Patagonia would be too tempting for foreign oil giants to ignore. YPF needs the know-how and the capital to fully exploit the oil fields in the south-western Nequen province, known as Vaca Muerta (Dead Cow), which according to official estimates holds 150 million barrels of oil. YPF is “open to capital and the possibility of working together with public or private companies in Argentina or abroad,” Boudou said. – Merco Press

Dominant Social Theme: Don’t cry for Argentina. It’s all under control …

Free-Market Analysis: Are Argentina’s top officials having second thoughts about their expropriation of Spain’s Argentine oil-producer? It would seem that way from the above news report via Merco Press.

If the move was as wildly destructive as people think it may have been, then this posture would tend to confirm the idea that one of the world’s more powerful and influential states is simply spinning out of control.

The results may be truly catastrophic, not just for Latin America but for the larger, struggling world.

This boom may well be ending – or certainly growing long-in-the-tooth after a decade or more.

Although the Argentine expropriation of Repsol made major shock waves, the Argentine government under President Cristina Fernandez has portrayed it as a judicious and necessary gambit.

Many other observers regardless of political affiliation have branded the move as a shallow populist one that will bring disaster to Argentina and environs.

As the predictions of damage mount, there is more speculation that Fernandez’s action may bring down not only her own government but other regional governments as well.

These predictions involve inevitably a peso devaluation that will set off a dollar-withdrawal frenzy in big regional banks. Real estate prices – radically inflated after a decade of monetary expansion – may well plunge. The results could affect large swaths of South America.

Countries that could be affected include Uruguay, Brazil, Chile and Peru among others – all countries that have pursued moderate market-based policies and have benefitted from the South American industrial and monetary boom.

Meanwhile, Repsol doesn’t seem apt to surrender. Here’s more from the article.

YPF is “open to capital and the possibility of working together with public or private companies in Argentina or abroad,” Boudou said.

Last week the Argentine president signed a bill expropriating 51% of YPF stock from Repsol, its majority shareholder, sealing a measure that has roiled the country’s trade ties with Europe.

Cristina Fernandez has argued that the move was justified because Argentina faces sharp rises in its bill for imported oil, and Repsol has failed to make agreed investments needed to expand domestic production.

In Madrid, a Repsol spokesman Tuesday said the company has warned its competitors that they will face legal action if they invest in YPF.

“The idea is to protect the assets that were confiscated in Argentina until the situation is resolved in a satisfactory way for the parties that are involved,” the spokesman said.

Conclusion: A cascading crisis in South America may still seem likely …

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ICYMI: Green Islamic fund initiative launched

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The Shams Tower Solar project, developed by Enviromena Power Systems, is an example of a CEDC highlighted project in the Middle East.
Enviromena Power Systems

Shari’ah compliant investment securities, sukuks, are to be made available for renewable energy projects such as photovoltaics. A Green Sukuk Working Group has been established to identify such investment opportunities.

The Climate Bonds Initiative, the Clean Energy Business Council (CEBC) of the Middle East and North Africa, and the Gulf Bond and Sukuk Association have launched a Green Sukuk Working Group. This working group will identify green energy projects that fall under Shari’ah-suitable categories for potential investors. A sukuk is a financial certificate, similar to a bond, that complies with Islamic religious law. The law does not allow interest payments.

The non-govermental organisation, CEBC, represents the private sector involved in the clean energy industry across the MENA region and is actively involved in the promotion of photovoltaic projects in the region. Working with the CEBC, the initiative seeks to develop financial products that comply with Islamic shariah law. “We’re looking closely at a couple of prospective bond issuances,” says initiative chairman and co-founder Sean Kidney.

The initiative aims to channel its market expertise to develop best practices and promote the issuance of sukuk for financing of climate change investments and projects, photovoltaic projects being a component. Aaron Bielenberg of the CEBC states, “There are a significant and growing number of projects, for example in renewable energy in the Middle East, that are ideally suited to sukuk investors. This group will help investors more easily identify Shari’ah compliant, clean energy investment opportunities.”

Nick Silver of the Climate Bonds Initiative says that there is an urgent need to mobilise the finance for renewable energy and climate adaption projects in the region. “Green sukuk is ideally suited for the financing of many of these investments,” Silver adds.

The Climate Bonds Initiative receives its funding on a per-project basis, from foundations and banks, and has yet to obtain financing for the green sukuk plan. “If you look at current projects across the region, and if a fraction of those were to be financed with green sukuks, then you’re talking about $10 to $15 billion,” says Nasser Saidi, CEBC chairman. “The time is right for a green sukuk.”

News:

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The White House Has Been Bragging About Falling Wages In The US

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Wolf Richter, Testosterone Pit | Jan. 15, 2012, 7:07 AM

150 factory workers in China threatened to jump off the roof of an iPhone factory unless they received a raise.

Similar stories are accumulating. Inflation, especially in food and other essentials, has been rampant over the last few years—and to make ends meet, desperate workers sometimes take drastic measures. These anecdotes underscore a major trend in China: skyrocketing cost of labor.

In the US, it’s the opposite. Since 2000, real wages (adjusted for inflation) have declined. The White House even touts this horrid statistic in its paper, Investing in America: Building an Economy That Lasts.

Clearly, the paper is not intended for the rank and file. It outlines how current policies are making America competitive with low-wage countries like China. And one of the principal strategies is … lowering wages. Graph from the White House paper: Above

The paper also touts the administration’s claim of having created 3.2 million jobs over the last 22 months. But these numbers are based on surveys, formulas, and statistical adjustments. The BLS’s Employment Population ratio, which the paper wisely leaves unmentioned, measures the percentage of people age 16 and older who have jobs. It’s the least corruptible employment number available—and at 58.5%, it’s only a fraction above the August level, which, at 58.1%, was the lowest reading since 1983. And it’s far below its peak of 64.7% in April 2000. From the Bureau of Labor Statistics:

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