An ongoing natural gas leak in Alaska has taken another turn for the worse: Hilcorp Alaska, the company which owns the underwater pipeline, has announced repairs cannot even begin until the ice surrounding it melts, presumably in mid-to-late March.

The crisis began on February 7, when a Hilcorp helicopter pilot spotted bubbling along the route of an 8-inch pipeline. The gas production facility, built in 1964 by Shell, is the oldest of the sixteen offshore platforms currently in the Cook Inlet. The next week, video footage of the leak was itself leaked, and put on YouTube by the environmental nonprofit group Inletkeeper.

Currently, it's estimated that the pipeline is leaking between 210,000 and 310,000 cubic feet of gas a day into the inlet. On February 20, Hilcorp announced in a letter to the Alaska Department of Environmental Conservation that it could not shut down the pipeline for fear of releasing crude oil into the ocean, nor could it repair the pipeline until mid-to-late March.

The pipeline was converted in 2005 from oil to fuel gas service, and still has residual crude oil in it. "If the gas supply were shut in," Hillcorp said, "seawater would enter the depressurized Pipeline through the leak displacing the remaining gas."

The letter also states that with "respect to repair, the conditions in the Inlet – the broken ice, exacerbated by high tidal flows and limited daylight – prevent the immediate dispatch of divers to inspect and contain the leak in the pipeline." The ten-page letter goes on to state that the methane released by the leak "may present a physical hazard (asphyxiation), but not a chemical hazard (toxicity)."

Of particular worry is the fate of the Cook Inlet belugas, listed as endangered since 2008. Only in December of last year did NOAA put out a roadmap for recovery for the whale, part of which listed the area of the leak as crucial to that plan. "If a significant hypoxic zone is created by a continuing natural gas discharge," NOAA said in a letter of its own, "Cook Inlet belugas and multiple [physical and biological features] of their critical habitat could be adversely affected."

Inletkeeper, which is planning on suing the company, is also questioning the basic logistics of the situation. "Basically Hilcorp is saying 'we cannot respond to an event in Cook Inlet in the winter,'" Bob Shavelson, advocacy director for the Homer, Alaska-based group told Alaska Public Radio. "Our response to that is, 'if you can't address an event whether it's a gas spill or an oil spill in Alaska in the winter, then you should go back to Texas, because you don't have a right to do business here.'"

Similar questions about the ability to repair in the cold have also been broached about the Dakota Access Pipeline, which saw its construction slow due to the frigid winters of North Dakota.

Source: InsideClimateNews</s>The Alaska Department of Environmental Conservation is requiring Hilcorp Energy Company to begin sampling and environmental monitoring of its damaged underwater natural gas pipeline, which has been leaking between 210,000 and 310,000 cubic feet of methane gas per day into Cook Inlet since early February.

In a Feb. 27 letter to Hilcorp Alaska Senior Vice President David Wilkins, Geoff Merrell, the Alaska Department of Environmental Conservation’s on-scene coordinator for the leak, gives Hilcorp until March 8 to send his agency a plan to gather data on the environmental effect of the continuing leak.

Hilcorp plans to send a team of divers to repair the leak — spotted by a Hilcorp helicopter on Feb. 7 — though Wilkins previously wrote to Merrell that ice in the Inlet is likely to delay this repair until mid- to late March.

As of Feb. 24, no samples have been taken of the air or water affected by the leak, according to a letter with that date from from National Marine Fisheries Service Alaska Region Administrator James Balsiger to the federal Pipeline and Hazardous Materials Safety Administration.

Because “results of the sampling and monitoring program could necessitate an order to evacuate the line to control the release,” Merrell’s letter also requires Hilcorp to send DEC a plan by March 13 for how it would shut in its wells and deactivate the pipeline, if required to.

The leaking pipeline carries processed natural gas used as fuel by four Hilcorp platforms in the Middle Ground Shoal field, approximately 5 miles off-shore near Nikiski. Hilcorp representatives have previously said that turning off the leaking pipe — thereby cutting off power to the platforms — could release oil into the Inlet if the pipeline, which previously carried crude oil and may still have crude residue inside, floods.

In previous correspondence with DEC, Hilcorp cited a computer simulation of the leak and its environment to “demonstrate the relatively small impact that the release is likely to have on methane concentrations in the water column near the plume,” according to a Feb. 20 reply to Merrell by Wilkins.

The simulation, done for Hilcorp by environmental consulting group SLR International, concluded that 84 percent of the leaked methane will reach the atmosphere, while 17 percent is likely to be dissolved in the water, resulting in a water-methane concentration that Hilcorp’s study concluded would be 1/500th of the minimum methane concentration that DEC states will be harmful to marine life.

Though Merrell wrote that the simulation and other work Hilcorp cited is “helpful,” he stated that it does “not satisfy the need for real-time, on-site empirical data necessary to conduct an impact assessment and prove the veracity of the model.”

The requirements DEC gave Hilcorp include weekly observations for live or dead fish or birds, measurements of dissolved methane, oxygen, and carbon dioxide in the water near the leak, air quality measurements, and monitoring of the leak’s acoustic effects in the Inlet waters, with weekly reports of results to Merrell.

Merrell wrote that “…delay or insufficient work plan preparation or quality may result in Hilcorp being deemed an unresponsive responsible party,” in which case DEC would take over the leak response, with Hilcorp financially liable for their work.

The area of Cook Inlet around the leaking pipe is designated critical habitat for endangered beluga whales by the National Oceanic and Atmospheric Administration. According to NOAA’s Balsiger, the Cook Inlet beluga population is estimated to consist of 340 individuals.

“There is a need to understand the environmental impacts, no matter how minor, on the environment of Cook Inlet, and particularly to the food web supporting the beluga whales,” Merrell wrote.

In addition to the possibility of methane displacing oxygen in the water, underwater noise from the leak could be another impact. The acoustic effects could have “implications for Endangered Species Act-listed species and their prey since it could affect feeding and transiting patterns within and beyond this portion of their critical habitat,” Merrell wrote.

Though a Feb. 23 flyover in search of belugas didn’t spot any, according to a DEC statement released Wednesday, the area around the leak is within the belugas’ preferred winter foraging grounds, Balsiger wrote. Harbor porpoise populations also have “a high likelihood of overlap in time and space” with the gas leak. Other marine mammals that may be affected include stellar sea lions, dall porpoise, killer whales, and humpback whales, though these are less likely to be near the leak this time of year, according to Balsiger.

Two conservation groups have threatened legal action against Hilcorp for the leak under the federal Clean Water Act, which allows private parties to sue for violations with 60 day’s notice. Cook Inletkeeper announced its intent to sue Hilcorp on Feb. 15. On Feb. 27, the Arizona-based Center for Biological Diversity requested that Environmental Protection Agency Administrator Scott Pruitt also act against Hilcorp, and gave notice of its intent to sue Hilcorp if the EPA does not.

In response to an emailed request for comments, Hilcorp External Affairs Manager Lori Nelson wrote that the company plans to release a statement on Thursday.

Reach Ben Boettger at ben.boettger@peninsulaclarion.com.</s>The story sounds familiar. For decades, oil and natural gas drilling have been proceeding and creating prosperity for those involved. At some point, significant earthquakes occur in areas where they were formerly very rare or nonexistent. Those quakes are linked to oil and gas drilling and production. The industry denies the link.

The quakes continue, get worse and finally get strong enough to do damage.

To those living in the United States, this reads like stories coming out of the fracking boom in states that include Oklahoma, Texas, Ohio, Kansas and Arkansas. To those living in Europe, it's the story coming out of The Netherlands, home to the Groningen Gas Field, one of the largest natural gas finds ever.

The Groningen field has been both a blessing and a curse for the Dutch. Since its discovery in 1959 the Dutch have reaped huge financial benefits from having their own secure and abundant source of natural gas. Beyond that, the country has, until recently, been a major exporter of natural gas to its European neighbors.

But the field has also proven to be a drag on the rest of the economy, inflicting what has been dubbed the "Dutch disease." In short, the Dutch disease refers to negative effects that a huge natural resource find can visit upon a society. These include a decline in other sectors of the economy and a strong currency which makes exports less affordable to foreign buyers. The moniker "Dutch disease" results from the fact that The Netherlands was the first place such effects were studied in detail. Related: Oil Prices Rise On OPEC Compliance Data And Plunging Dollar

What has caught the Dutch by surprise--and may someday soon catch America by surprise--is the speed with which its decades-long reliance on a large initial endowment of natural gas has turned into a liability.

First, there were the earthquakes linked to drilling and production operations in Groningen which have forced the government (part owner of the field) to scale back production to reduce the frequency and severity of those quakes. This production decline of more than 50 percent has meant a serious loss of revenue for the government which used those revenues for decades to supplement the government's budget. Government gas revenues dropped by more than half from €13 billion to around €5 billion from 2013 to 2014.

Second, as a result of the production cutbacks The Netherlands is now a net importer of natural gas, instantly losing its self-sufficiency status. Europe's gas now will likely have to come increasingly from Russia whose relations with Europe are replete with complications.

Third, the Dutch have failed to prepare for this day. Instead, they blithely made themselves deeply dependent on natural gas for their energy needs. Some 98 percent of Dutch homes use natural gas for heating and cooking. Renewable energy makes up a paltry 5.5 percent of the country's energy mix as of 2014.

Fourth, the Dutch are still obliged to honor long-term contracts which force them to deliver substantial quantities of natural gas to customers outside the country. The country is increasingly facing the strange predicament of having to import more and more natural gas to offset what it must ship abroad. This is in a country whose dominant field, Groningen, is now 80 percent depleted.

And, here is where the Dutch situation ought to be a warning to the United States. America is entering into more and more long-term contracts to export liquefied natural gas (LNG) to customers in Europe and Asia even as the country remains a net importer. There is good reason to believe that most estimates of future natural gas production in the United States are far too optimistic. Let me quote for the second time in three weeks from an independent analysis of U.S. shale gas production trends (the only class of natural gas experiencing production growth in recent years):

Shale gas production overall has declined by 4.7 percent since peaking in February 2016 (down 2.1 billion cubic feet per day...). All shale plays have peaked and older plays, like the Barnett and Haynesville, are down 38 percent and 52 percent, respectively. Related: Oil Rig Count Hits A 17-Month High

Second, the U.S. electric utility industry has added significant natural gas-fired generating capacity in response to two trends: government regulation of greenhouse gas emissions and the low price and rising availability of natural gas. Despite the election of Donald Trump, who favors a return to coal, the low price of natural gas will probably allow the conversion to and expansion of natural gas-fired capacity to continue...until it can't. At which time, we may be stuck with much higher electricity costs.

The promised natural gas deliveries will likely not be available at low prices. Production declines will result in a battle over who gets the remaining supplies, thereby hiking prices for U.S. consumers. The U.S. utility industry may rue the day it chose to make itself so heavily dependent on natural gas.

Finally, states that became addicted to money from the natural gas boom are finding the bust difficult to navigate. In comparison, the Dutch had one large boom that lasted for decades. The kind of exploration and development that is taking place in U.S. shale gas fields requires constant drilling just to maintain production at current levels. We can expect boom and bust in short spurts from here forward. That signals that the cost of exploiting the remaining shale gas resource (again, until now the only growth area in U.S. natural gas production in recent years) will almost surely stair step higher as lower-quality deposits are tapped at greater and greater expense.

The Dutch have had a very long love affair with natural gas. But, as it turns out, a seemingly comfortable, stable relationship with natural gas can unravel just as quickly as a real love affair, leaving one dazed and asking how it all happened so fast.

Americans may not be as dependent on natural gas as the Dutch. But they have rushed into their own torrid love affair with natural gas and lost sight of the fact that affairs which start out torrid are the same ones that tend to flame out quickly, surprising everyone with their sudden demise.
• None Less Earthquakes In Shale Territory: Good News For U.S. Frackers?
• None The EV Myth – Electric Car Threat To Oil Is Wildly Overstated</s>March 2, 2017

 by Dan Joling, The Associated Press

ANCHORAGE, Alaska—A second environmental group has given formal notice that it will sue the owner of an underwater pipeline spewing natural gas into Alaska’s Cook Inlet.

The inlet is home to endangered beluga whales, salmon and other fish. Gas since at least Feb. 7 has bubbled from an 8-inch pipeline owned by Hilcorp Alaska LLC. The pipeline moves processed natural gas from onshore to four drilling platforms.

The Center for Biological Diversity in a letter to the company and the Environmental Protection Agency said the leaking gas is a threat to belugas. The Tucson, Arizona-based group said Hilcorp is violating four federal laws: the Clean Air and Clean Water acts, the Endangered Species Act and the Pipeline Safety Act. A lawsuit requires a 60-day notice.

“Belugas and their prey are being harmed every day this leak continues,” said Miyoko Sakashita, the group’s oceans program director, in a statement. “We can’t wait another month or more for the sea ice to clear before plugging the leak.”

The leak is about four miles off shore in 80 feet of water. A Hilcorp helicopter crew Feb. 7 spotted gas bubbling to the surface. The company estimates the pipeline is emitting 210,000 to 310,000 cubic feet of gas per day. The Alaska Department of Environmental Conservation and the federal Pipeline and Hazardous Materials Safety Administration are investigating.

The pipeline formerly moved crude oil. Shutting off gas could allow seawater to infiltrate and possibly allow residual crude oil to leak into the inlet, according to Hilcorp.

Spokeswoman Lori Nelson in a statement said the company has shut down non-essential equipment on production platforms. Divers remain the best option for repairs, she said, but the risk is too great.

“Current ice conditions prevent divers from accessing and repairing the line safely,” she said. “Hilcorp is ready to proceed once ice conditions allow for safe repair operations to begin.”

Cook Inletkeeper, a non-profit dedicated to protecting the Cook Inlet watershed, previously gave 60-day formal notice that it intends to sue Hilcorp under provisions of the Clean Water Act.</s>The Ministry of Natural Resources along with the Ministry of Public Infrastructure will be exploring how the natural gas from oil production can be incorporated into local energy consumption.

Plans are apace for the production of crude oil by 2020 but not much has been said of what will be done with the natural gas that will be mined with the oil.

Minister of Natural Resources, Raphael Trotman pointed out on Thursday that the Ministry is working with ExxonMobil to determine the quantity of the natural gas that would be found with the oil.

ExxonMobil’s Country Manager Jeff Simon explained to the media that the gas will be re-injected into the reservoirs when the oil is separated during the production stage. That process keeps the pressure high for the mining of the oil.

Minister Trotman noted that the government will explore the uses of the natural gas as part of the green economy agenda once the remaining quantity is determined. “The question is how much of that is going to be left over for us to possibly use for the powering of our generators for electricity in Guyana,” Minister Trotman said.

Considerations include using the natural gas to power the alumina plant on which the government is currently conducting a study to determine the feasibility of resuscitating it. Sourcing sufficient energy for the running of the plant is a major consideration in the restart.

There is also the possibility of using the natural gas “as a transition source” to greener energy sources like hydro and solar electricity. Natural gas, while not green, is cleaner than the fossil fuel that is being consumed now.

“There are matters that we are actively considering, particularly the Ministry of Public Infrastructure,” Minister Trotman noted.

However Minister Trotman cautioned that these possibilities are still very much in the exploration phase since the government will ultimately determine whether it uses or sells its natural gas.

“Looking at the price per cubic foot of gas now and what is projected in the future and what it will take to develop that and whether it makes economic sense to do anything with it,” Minister Trotman said, are some of the factors that will determine the government’s final decision.
• 2017, Country Manager Jeff Simon, ExxonMobil, GINA, Guyana, Minister of Natural Resources Raphael Trotman, Ministry of Natural Resources, Natural Gas, oil and gas sector</s>Construction of a $250-million natural gas pipeline from Union Gas’ Dawn Compressor Station in Lambton County to its Dover Transmission Station in Chatham-Kent is expected to begin in May, boosting the local economy while providing additional energy for commercial and residential customers in Chatham-Kent and Windsor-Essex.

Union Gas received approval for increasing the capacity of its Panhandle Transmission System on Feb. 23. It had filed an application with the Ontario Energy Board last June.

The project, expected to be completed by November, will see the construction of a 36-inch gas pipeline over a length of 40 kilometres. Pipeline construction will begin at the gas company’s compressor station at Bentpath in Dawn-Euphemia Township, and will end at the Dover site at Town Line Road and Belle Rose Line. The new pipeline will replace an existing pipeline.

Andrea Stass, manager of media relations for Union Gas, said Thursday the Panhandle pipeline has not been updated for some time.

“It has reached a point where we are going to actually increase the size to help serve the surrounding areas,” she said.

Stass couldn’t pinpoint how many workers will be employed over the project’s six-month duration, but said it’s expected the work will generate considerable economic activity.

“Where they can our construction contractors will use local contractors and local vendors,” she said.

Wallaceburg Chamber of Commerce president Karen Debergh said Thursday the pipeline project will be an enormous boost to the local economy, as construction workers will be looking for local accommodation.

“The spin-off for the restaurants and grocery stores and even the stores will be great for us,” Debergh said.

She said the pipeline project will not only provide an economic benefit during its construction, but will also provide an economic boost once local natural gas capacity has been enlarged.

The project is also expected to benefit Essex County’s $2-billion greenhouse industry.

Stephen MacKenzie, CEO of the Windsor-Essex Economic Development Corp., called the OEB approval “great news” for the region and a “strengthening” of their infrastructure.

MacKenzie said Thursday that while the pipeline expansion will be a big benefit for the fast-growing greenhouse sector, having the pipeline approved opens up the opportunity for smaller lateral lines that could be run off it to service business at additional sites in Windsor-Essex.

“The fact that it creates the opportunity for further expansion is even an additional benefit,” he said.

Windsor-Essex municipal officials have been lobbying for the pipeline expansion for years. Organizations such as the Ontario Greenhouse Vegetable Growers have also supported and pushed for the pipeline project.

In a letter to the Ontario Energy Board, OGVG said right now natural gas resources in the Essex and Chatham-Kent regions are at capacity and an expansion of service is necessary to support further economic development in the region.

OGVG said without an immediate and significant increase in the availability of natural gas capacity, continued growth in the agricultural industry served by the Panhandle system would be adversely affected and could force Ontario greenhouse operators to look to Ohio for expansion.

Stass, meanwhile, said Union Gas will employ a “lift and lay” construction process to install the pipeline. Specifically, the existing 16-inch diameter steel pipeline will be removed (or lifted) and replaced with the proposed 36-inch diameter steel pipeline in the same easement, with the exception of those sections of pipe deemed not practical to remove as determined by an engineering assessment, such as major road and watercourse crossing locations.

“It's not a net new construction of a pipeline, it's a removing of one and replacing with a larger one,” she said.</s>Columbia Gas of Virginia customers will benefit from lower natural gas commodity prices with an 8.8 percent reduction in total monthly customer bills. The proposed prices take effect with customer bills being mailed after March 1.

The new total residential monthly bill is $119.49 when compared to the current total monthly bill of $130.99, based on a seasonal usage level of 10 Dekatherms (Dth). A Dth is the measurement used for natural gas usage and is the equivalent of 1000 cubic feet (Mcf).

“This reduction in gas costs is good news for our customers and clearly reinforces the need to support a strong natural gas production industry,” said Brent Archer, Columbia’s President. “It’s important to recognize that the ability to make domestically produced natural gas readily available results in a direct benefit for our customers in the amount they pay for monthly service.”

When Columbia Gas is able to purchase lower-priced natural gas on the commodity market, it is passed along directly in the form of lower prices to the more than 262,000 residential, commercial and industrial customers Columbia Gas serves across Virginia.

Columbia Gas of Virginia delivers safe, reliable and clean natural gas to over 262,000 customers in portions of Northern Virginia, Hampton Roads, suburban Richmond, Central Virginia, and the Shenandoah Valley, the Lynchburg region and parts of Western Virginia. NiSource (NYSE: NI) is one of the largest fully-regulated utility companies in the United States, serving approximately 3.5 million natural gas customers and 500,000 electric customers through its local Columbia Gas and NIPSCO brands.

Always call 811 before you dig and Dig with CARE.</s>ASHGABAT, May 30 Turkey is ready to deliver Turkmenistan's natural gas to consumers in Europe, Turkish President Abdullah Gul said on Thursday, supporting the Central Asian nation's plans to build alternative pipelines and ease dependence on exports to Russia.

Turkmenistan, a Turkic Muslim nation of 5.5 million, pins hopes of future propriety on its giant natural gas reserves, the world's fourth largest.

As Turkmenistan plans to start production at the Galkynysh natural gas deposit, the world's second largest, by June 30, its current export outlets are limited by former imperial master Russia, China and neighbouring Iran.

"We have discussed issues and signed an agreement on bringing Turkmen energy supplies to Europe via Turkey," Gul said through an interpreter after talks with Turkmen President Kurbanguly Berdymukhamedov in the Turkmen capital Ashgabat.

On Thursday, the two presidents oversaw the signing of a framework agreement on cooperation in Turkmen gas deliveries to Turkey. It was inked by Turkmen Deputy Prime Minister Baymurad Hojamukhamedov and Turkish Energy Minister Taner Yildiz.

Senior Turkish officials had said earlier Turkmenistan would be welcome to link to the $8-billion Trans-Anatolian natural gas pipeline (TANAP).

The TANAP project, controlled by Azerbaijan's state energy firm SOCAR, aims to take Azeri gas to Turkey and to markets in Europe. Azeri officials have said they will back the construction of a gas pipeline from Turkmenistan to Azerbaijan across the Caspian Sea, if Ashgabat takes such a decision.

Construction of the TANAP pipeline, which will be built from the Turkish-Georgian border to Turkey's border with Europe, is expected to start at the end of 2013.

TANAP is due to start carrying 16 billion cubic metres of gas a year from Azerbaijan's Shah Deniz II offshore field from 2018. The total could eventually rise to as much as 60 bcm.

Turkmenistan's exports to Russia, once the traditional market for Turkmen gas, have shrunk to roughly a quarter in the past few years to around 10 bcm per year.

Exports to China stood at 20 bcm in 2012, Turkmen data show. Annual export capacity to Iran is 14 bcm, but actual - and undisclosed - exports are much smaller.

Turkmenistan expects to produce between 75 bcm and 80 bcm of natural gas this year, up from 70 bcm in 2012, a senior Turkmen energy official said last week. It aspires to more than triple annual gas output to 250 bcm by 2030. (Writing by Dmitry Solovyov; Editing by James Jukwey)</s>* Refineries switch to gas from more expensive fuel oil

LONDON April 10 Natural gas flow from Israel's new giant offshore field is giving the country's two refineries a new lease of life, slashing their costs and ensuring supply security.

Gas from the Tamar field off its Mediterranean coast reached Israel for the first time on March 30 and the refineries several days later.

Once energy poor, the new field is set to meet Israel's gas needs for decades, and eventually turn it into an exporter.

"The Israeli gas is much cheaper, much more accessible and in enormous quantities," Rony Solonicof, chief economist at the Bazan Group, which runs one of Israel's refineries, told Reuters.

This abundant and secure source of natural gas ends years of supply concerns following constant disruptions from Egypt, Israel's previous intermittent supplier and declining output from the Yam Tethis offshore field.

"The Tamar start-up represents a considerable relief for Israeli energy security and, with a time-lag, costs, after the country saw successive increases in the cost of energy use as a result of the sporadic nature of Egyptian gas imports from February 2011 (and the ultimate cancellation of that deal)," Catherine Hunt, analyst at IHS, said.

The gas bonanza will boost the tight economics of the Bazan Oil Refineries in the northern city of Haifa and the Paz refinery in Ashdod, south of Tel Aviv as they no longer require the more expensive fuel oil to power their energy-intensive facilities.

Israel refineries first started using natural gas in 2005.

In the case of Bazan, the switch back to natural gas is set to shave 2 percent off total costs. For Paz, it will reduce costs by an estimated 1.5 percent.

The gas field, located 90 kilometres off Israel's northern coast, has an estimated 10 trillion cubic feet of gas. It is guarded by the Israeli army and though facing potential security risks, is seen as a safe and reliable source of energy.

Egypt suspended gas supplies to Israel last April following a string of attacks on the pipeline in the Sinai peninsula, depriving Israel of 40 percent of its natural gas supplies.

At the same time, supplies from Israel's Yam Tethis natural gas offshore field have gradually depleted in recent years, further tightening supplies and forcing power plants and refiners to power their facilities with more expensive and polluting heavy gasoil.

Natural gas from the Tamar field costs around $6 per million British thermal units (mmbtu), around half the cost of gasoil, according to Solonicof.

That compares to average gas prices of $4 per mmbtu in the United States, which has seen its prices tumble thanks to shale gas, and $12 per mmbtu in Europe and over $15 per mmbtu in Asia.

Bazan expects the switch to full gas operation to reduce its costs by $200 million a year out of total expenses which reached $9.7 billion in 2012.

"The financial benefit is even bigger when you know that the (Tamar) gas is much cleaner which extends the life span of the refining equipment," Solonicof added.

The 197,000 barrels per day (bpd) Bazan refinery exports around a quarter of its output to eastern Mediterranean countries. In January, it started a 25,000 bpd cracker, which turns feedstocks into refined products, at an investment of $517 million. The company reported a $46 million net loss in 2012.

For Paz, Israel's largest distributor of refined products, the gradual switch to natural gas will cut costs for its 95,000 bpd Ashdod refinery by more than $50 million per year, according to trade sources.

Paz reported a loss of ILS 166 million ($45 million) in 2012 in its refining segment due to extended maintenance delays. Total refining costs for the year reached ILS 13.8 billion.

In April 2012, Paz signed a 15-year supply agreement with the operators of the Tamar field which the company estimated to be worth a total of $700 million.

According to a Paz spokeswoman, gas supply disruptions in 2012 cost the company around ILS 150 million, "partly because of the need to replace the gas with more expensive alternatives" such as diesel and fuel oil. (Editing by James Jukwey)</s>Tanzania will continue building a China-funded $1.2 billion gas pipeline from the south of the country to the commercial capital Dar es Salaam despite violent protests over the project, the energy ministry said.

Tanzania's parliament was due to approve the 2013/14 budget proposals by the ministry of energy and minerals on Wednesday but riots against the pipeline in the gas-rich Mtwara region stopped Parliamentary proceedings.

Tanzanian lawmakers approved the budget on Saturday and said the work on the pipeline will continue until it is complete in December 2014.

"Anyone who opposes this pipeline is not one of us," Tanzania's energy and minerals minister, Sospeter Muhongo announced in parliament.

Tanzania estimates it has 41.7 trillion cubic feet (tcf) of recoverable natural gas reserves. Discoveries offshore of Tanzania and Mozambique waters have led to predictions the region could become the world's third-largest exporter of natural gas.

Residents of the southern Mtwara region are opposing construction of the 532 km (330 mile) pipeline, financed by a Chinese loan, until they get a bigger share of benefits from gas development.

Mtwara police commander, Linus Sinzumwa, told Reuters three people were killed in riots on Wednesday and Thursday in the region, with 121 people arrested.

Parliament on Saturday appointed a committee to investigate the cause of the riots and come up with recommendations for curbing the recurring violence against the government's pipeline project.

Muhongo insisted that the government would proceed with the construction of the pipeline despite the violent protests, saying the project would help to spur economic growth in Tanzania to 8 percent by 2015 from 6.9 percent in 2012.

"The only way of growing our economy is to have this pipeline in place ... the pipeline will banish poverty in our country," he said.

Muhongo also said it would cost $500 million to reform the state-run power utility, TANESCO, which will include offsetting its debts.

"The World Bank will give us $300 million and we have received a $200 million grant from the African Development Bank for the transformation of TANESCO," he said.

The minister said the government would study various proposals for the reform of the public utility.

The government has previously said it was considering splitting the loss-making TANESCO into three separate entities responsible for power generation, transmission and distribution.

The power monopoly had become inefficient, with only 21 percent of Tanzanians currently having access to electricity, which is also unreliable most of the time, he said.
A damaged natural gas pipeline operating under Cook Inlet offshore of Nikiski (near Anchorage, Alaska) continues releasing between 6,000–8,800 cubic meters (210,000–310,000 cubic feet) of gas per day. Pipeline operator Hilcorp Energy states that due to sea ice conditions, repairs will not be possible for weeks.