07 August 2006: Singapore to import LNG to meet rising energy demand

According to Channelnewsasia :

Singapore has decided to import Liquefied Natural Gas (LNG) to meet its future rising demand for energy and to ensure a more stable pricing structure.

It will be developing an LNG terminal which will churn out 3 million tonnes of gas a year when ready in 6 years.

Singapore needs to diversify its energy sources to ensure it is not over-reliant on a single source for its energy needs.

Speaking at the inaugural Energy Market Authority forum, Trade and Industry Minister Lim Hng Kiang said, as such, the government was inviting investors to build an LNG terminal expected to cost about half a billion US dollars.

In the long term, this could help ensure more stable electricity prices.

He said: “For LNG, because of the heavy investments in the chain, in the ships, in the facility itself, these tend to be fairly long contracts, therefore prices tend to be more stable. Whereas, piped gas, if they are linked to fuel oil prices, then they tend to be more volatile.”

Mr Lim said this was a big investment and the government would consider co-funding the project if necessary.

Singapore now gets its piped natural gas supplies from Indonesia and Malaysia which fuel 80 percent of its power generation.

But it has been looking at alternative sources, especially after a power outage two years ago disrupted gas flow to its power stations via Indonesia’s pipelines, plunging part of the country into darkness.

Besides inviting bids to build and run the terminal, the Energy Market Authority is also seeking industry feedback on issues such as where best to locate the project.

It expects to assess the bids and select a winning one by the first quarter of 2008.

Industry players have till the first half of next year – when preparations for request-for-proposals are expected to be firmed up – to have their say.

Still to be ironed out are issues like the terminal ownership structure, the business model and the regulatory framework.

At the forum, it was also revealed that the government’s decision to introduce competition into the electricity market has reaped results.

Singapore’s ranking for electricity price competitiveness has improved 13 places.

It has achieved 29th position out of 47 countries last year, up from 42nd out of 48 countries in 2001.

This is based on the International Price Competitiveness Ranking by the Institute for Management Development in Switzerland.

In addition, while fuel oil prices have increased by about 100 percent over the last three years, electricity tariffs in Singapore have risen by only about 27 percent over the same period.

- This piece of old news demands new place in this blog!!! In 6 years time, 2012 our LNG terminal will be ready for imports from many countries….hopefully the prices then would be REALLY competitive! Otherwise…it will be darkness for us!

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Shanghai to get LNG supply from Malaysia

According to thestaronline.com

BEIJING: Shanghai has started construction of a 4.6 billion yuan liquefied natural gas (LNG) terminal that will start receiving the fuel from Malaysia in 2009.  

The plant will return three million tonnes a year of LNG to gas form during its first phase, the Shanghai government said on its website yesterday.  

Shenergy Group, owned by the city government, and partner China National Offshore Oil Corp are building the project.  

The world’s biggest energy user after the US, China in October agreed to buy US$25bil of LNG over 25 years from Malaysia.  

China wants to increase consumption of natural gas to 8% of its energy needs in 2010 from about 3% to cut pollution and reliance on coal and oil.  

Petroliam Nasional Bhd (Petronas) would start supplying an initial 1.1 million tonnes of LNG a year starting in 2009, the Shanghai government said. 

Petronas would increase the supply to three million tonnes, equivalent to four billion cu m, in 2012, it added. 

Natural gas supplies to Shanghai may reach six billion cu m by 2010, it said.

- See Also

Singapore hopes for Russian LNG supplies

Latest LNG News!!

Which Industry don’t use Electricity?

Is Liquefied Natural Gas (LNG) Feasible in Singapore?

Singapore hopes for Russian LNG supplies

Hong Kong utility CLP plans $1.0 bln LNG terminal

LNG at best an interim measure, alternatives must be looked into

Indonesia to cut LNG supply to 6 million tons after 2010

Russia agrees to steep price increase for Turkmen gas

Russia may face gas supply crisis in 2 years - Gref

Iran may shift gas to LNG if pipeline prices low

Asia faces US buying power for spot LNG

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Russia assures Japan will get Sakhalin LNG on time

According to Yahoo!Asia News :

MOSCOW, Jan 29 (Reuters) – The Russian energy ministry has assured Japan it will get liquefied natural gas (LNG) from Sakhalin island on time in 2008 after Russia’s Gazprom gained control of the scheme from Shell, the ministry said on Monday.

Royal Dutch Shell and its Japanese partners, Mitsui and Mitsubishi , agreed last year to sell control in the Sakhalin-2 project to gas export monopoly Gazprom for $7.45 billion after months of pressure from Russian environmental authorities.

The $22-billion project, one of the world’s biggest LNG developments, is due to supply the first LNG tanker to Japan in the third quarter of 2008 but its participants had said pressure from state officials could delay the plan.

The pressure quickly subsided after Gazprom took the leadership of the project.

The energy ministry issued the statement after a meeting in Moscow between Deputy Minister Andrei Dementyev and Japan’s Energy Director Harufumi Mochizuki.

“Andrei Dementyev has stressed that changes in the shareholding structure won’t affect implementation of the contracts and all LNG volumes would be delivered to customers in Japan strictly on time,” the statement said.

Sakhalin-2 has already presold most of its output of 9.6 million tonnes a year of LNG to customers in Japan, South Korea and the United States.

- Well, with Indonesia cutting the LNG exports to Japan by half by 2010…Russian might just be their major hope for their energy security.

See Also:
Gazprom may supply S. Korea with gas from 2012
S.Korea, Russia to cooperate in gas development
Experts Predict Black-Out Winters in Europe
Russia’s Gazprom starts LNG supplies to S. Korea
Russia to handle LNG venture alone
Spain, Shunning Nuclear Power, Ends Up Hooked on Natural Gas
Output from Exxon Russia field to decline from 2008
Indonesia to halve LNG to Japan Observers say move a sign of tough times ahead in energy sector
Sakhalin-2 Has Buyers to Merit Third Production Line (Update1)
China’s August Natural Gas Output Gains 15 Percent on Demand
Korea Needs to Prepare for Global LNG War
Russia may face gas supply crisis in 2 years – Gref

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Climate change report paints doomsday scenario for Sydney

According to Channelnewsasia

SYDNEY : Global warming will leave Sydney in permanent drought by 2070, with huge seas battering its famous beaches and raging bushfires threatening its outskirts, a report says.

The report from the national government’s scientific agency predicts a grim future for Australia’s largest and best-known city, concluding that climate change is inevitable and the city should start immediate planning.

The CSIRO predicts the average Sydney temperature will rise 4.8 Celsius (40 degrees Fahrenheit), well above the average 3.0 predicted globally by the UN Intergovernmental Panel on Climate Change.

Rainfall is forecast to fall by 40 percent and the number of heat-related deaths in the city of four million is expected to soar almost 800 percent from the current 176 to 1,312 by 2050.

The report said a 20 centimetre (7.9 inch) rise in sea levels would result in storm surges of 22 metres on Sydney’s beaches, leaving them eroded and inundating sea-side homes.

The heat is expected to whip up 24 percent more wind storms and fuel almost double the number of severe bushfires in the state of New South Wales.

State Premier Morris Iemma, who commissioned the CSIRO report, said the national and state governments needed to act to ensure the city’s future.

“This might sound like a doomsday scenario but it’s one we must confront,” Iemma, from the Labor party, said.

“We don’t need to be waiting for the impact, it’s real and it’s here.”

He criticised the federal Coalition government for refusing to sign up to the Kyoto protocol on reducing greenhouse gas emissions, calling for a national summit to address the issue of climate change.

Prime Minister John Howard and his close ally, US President George W. Bush, lead the two developed countries that have refused to ratify the UN protocol.

Climate change and the scarcity of water are shaping as key battlegrounds in the upcoming national election between Howard’s Coalition and the main opposition Labor party.

Australia, already the world’s driest inhabited continent, is struggling with its worst drought in more than a century.

Report author and CSIRO researcher Ben Preston said there was no doubt climate change was occurring and that, unlike previous historical shifts, mankind was driving the change.

“What’s important for people to understand is that this is not simply a lot of hand waving, there’s quite a bit of scientific research and effort both within Australia and internationally that goes into producing these estimates,” he told public radio.

“The problem there is that future climate change is already built into the system, so the warming we’ve been experiencing in recent years is really a function of greenhouse gases we emitted a few decades ago.”

Preston said change was inevitable but long-term planning could help Australia cope.

“Australia has demonstrated in the past that it has quite a significant capacity to cope with rainfall, water scarcity and pretty significant rainfall variability but maintaining a healthy and sustainable water supply over the future independence of climate change is obviously going to require some considerable reforms in terms of how we use water and how we price water,” he said.

The CSIRO’s study comes as some 500 experts meet in Paris this week ahead of the release on the UN Intergovernmental Panel on Climate Change’s first report since 2001 on the state of scientific knowledge on global warming.

- This article regarding climate change that is due to global warming is the tip of the ice berg. The immediate effects of global warming are weather changes…that create worst drought, flooding, wild bush fires, tornado, hurricane and other related events such as snow storms and early spring and winter….

The problems of human survival will greatly affected by the environment we live in and every single life depends on the availability of food and water that the environment provides for us. Many countries uses river dams as their primary source of electricity and many had been struggling with lower electricity production due to dropping water supply.

Desertification of land due to lack of water will eventually create Mars like planet on Mother Earth… Lifeless…

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Once a Dream Fuel, Palm Oil May Be an Eco-Nightmare

According to Peakoil.com -> The New York Times :

AMSTERDAM, Jan. 25 — Just a few years ago, politicians and environmental groups in the Netherlands were thrilled by the early and rapid adoption of “sustainable energy,” achieved in part by coaxing electrical plants to use biofuel — in particular, palm oil from Southeast Asia.

Spurred by government subsidies, energy companies became so enthusiastic that they designed generators that ran exclusively on the oil, which in theory would be cleaner than fossil fuels like coal because it is derived from plants.

But last year, when scientists studied practices at palm plantations in Indonesia and Malaysia, this green fairy tale began to look more like an environmental nightmare.

Rising demand for palm oil in Europe brought about the clearing of huge tracts of Southeast Asian rainforest and the overuse of chemical fertilizer there.

Worse still, the scientists said, space for the expanding palm plantations was often created by draining and burning peatland, which sent huge amounts of carbon emissions into the atmosphere.

Considering these emissions, Indonesia had quickly become the world’s third-leading producer of carbon emissions that scientists believe are responsible for global warming, ranked after the United States and China, according to a study released in December by researchers from Wetlands International and Delft Hydraulics, both in the Netherlands.

It was shocking and totally smashed all the good reasons we initially went into palm oil,” said Alex Kaat, a spokesman for Wetlands, a conservation group.

The production of biofuels, long a cornerstone of the quest for greener energy, may sometimes create more harmful emissions than fossil fuels, scientific studies are finding.

As a result, politicians in many countries are rethinking the billions of dollars in subsidies that have indiscriminately supported the spread of all of these supposedly eco-friendly fuels for vehicles and factories. The 2003 European Union Biofuels Directive, which demands that all member states aim to have 5.75 percent of transportation run by biofuel in 2010, is now under review.

If you make biofuels properly, you will reduce greenhouse emissions,” said Peder Jensen, of the European Environment Agency in Copenhagen. “But that depends very much on the types of plants and how they’re grown and processed. You can end up with a 90 percent reduction compared to fossil fuels — or a 20 percent increase.”

He added, “It’s important to take a life-cycle view,” and not to “just see what the effects are here in Europe.”

In the Netherlands, the data from Indonesia has provoked soul-searching, and helped prompt the government to suspend palm oil subsidies. The Netherlands, a leader in green energy, is now leading the effort to distinguish which biofuels are truly environmentally sound.

The government, environmental groups and some of the Netherlands’ “green energy” companies are trying to develop programs to trace the origins of imported palm oil, to certify which operations produce the oil in a responsible manner.

Krista van Velzen, a member of Parliament, said the Netherlands should pay compensation to Indonesia for the damage that palm oil has caused. “We can’t only think: does it pollute the Netherlands?”

In the United States and Brazil most biofuel is ethanol (made from corn in the United States and sugar in Brazil), used to power vehicles made to run on gasoline. In Europe it is mostly local rapeseed and sunflower oil, used to make diesel fuel.

In a small number of instances, plant oil is used in place of diesel fuel, without further refinement. But as many European countries push for more green energy, they are increasingly importing plant oils from the tropics, since there is simply not enough plant matter for fuel production at home.

On the surface, the environmental equation that supports biofuels is simple: Since they are derived from plants, biofuels absorb carbon while they are grown and release it when they are burned. In theory that neutralizes their emissions.

But the industry was promoted long before there was adequate research, said Reanne Creyghton, who runs Friends of the Earth’s campaign against palm oil here.

Biofuelswatch, an environment group in Britain, now says that “biofuels should not automatically be classed as renewable energy.” It supports a moratorium on subsidies until more research can determine whether various biofuels in different regions are produced in a nonpolluting manner.

Beyond that, the group suggests that all emissions arising from the production of a biofuel be counted as emissions in the country where the fuel is actually used, providing a clearer accounting of environmental costs.

The demand for palm oil in Europe has soared in the last two decades, first for use in food and cosmetics, and more recently for fuel. This versatile and cheap oil is used in about 10 percent of supermarket products, from chocolate to toothpaste, accounting for 21 percent of the global market for edible oils.

Palm oil produces the most energy of all vegetable oils for each unit of volume when burned. In much of Europe it is used as a substitute for diesel fuel, though in the Netherlands, the government has encouraged its use for electricity.

Supported by hundreds of millions of euros in national subsidies, the Netherlands rapidly became the leading importer of palm oil in Europe, taking in 1.7 million tons last year, nearly double the previous year.

The increasing demand has created damage far away. Friends of the Earth estimates that 87 percent of the deforestation in Malaysia from 1985 to 2000 was caused by new palm oil plantations. In Indonesia, the amount of land devoted to palm oil has increased 118 percent in the last eight years.

In December, scientists from Wetlands International released their calculations about the global emissions caused by palm farming on peatland.

Peat is an organic sponge that stores huge amounts of carbon, helping balance global emissions. Peatland is 90 percent water. But when it is drained, the Wetlands International scientists say, the stored carbon gases are released into the atmosphere.

To makes matters worse, once dried, peatland is often burned to clear ground for plantations. The Dutch study estimated that the draining of peatland in Indonesia releases 660 million ton of carbon a year into the atmosphere and that fires contributed 1.5 billion tons annually.

The total is equivalent to 8 percent of all global emissions caused annually by burning fossil fuels, the researchers said. “These emissions generated by peat drainage in Indonesia were not counted before,” said Mr. Kaat. “It was a totally ignored problem.” For the moment Wetlands is backing the certification system for palm oil imports.

But some environmental groups say palm oil cannot be produced sustainably at reasonable prices. They say palm oil is now cheap because of poor environmental practices and labor abuses.

“Yes, there have been bad examples in the palm oil industry,” said Arjen Brinkman, a company official at Biox, a young company that plans to build three palm oil electrical plants in Holland, using oil from palms grown on its own plantations in a manner that it says is responsible.

“But it is now clear,” he said, “that to serve Europe’s markets for biofuel and bioenergy, you will have to prove that you produce it sustainably — that you are producing less, not more CO2.”

- Let’s just say that bio-fuel may be bad for Environment…

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Oil and Natural Gas Prices Jump on Forecasts of More Cold

According to The New York Times :

Oil prices settled just below $57 a barrel yesterday — a gain of almost $3 — and the price of natural gas soared more than 11 percent on expectations of more arctic weather in the United States.

Light crude for March delivery jumped $2.96, to settle at $56.97 a barrel on the New York Mercantile Exchange. Prices reached as high as $57.05 during trading before falling back.

The March contract for Brent crude oil at the ICE Futures exchange in London settled at $56.39 a barrel, up $2.71.

Natural gas soared more than 80 cents, or 11.6 percent, to settle at $7.740 per 1,000 cubic feet on the New York exchange.

“People were digging their spurs into it; this is just a lot of people running to get out of the way of the rally,” said Tim Evans, energy analyst at Citigroup Global Markets. “There wasn’t a lot of foresight, not a lot of calculation to it. It’s just a reaction to the cold weather.”

Seven-day forecasts yesterday predicted that temperatures would dip below zero in the Midwest, the heart of the natural gas market, said Phil Flynn, an analyst at the Alaron Trading Corporation in Chicago.

Colder-than-normal temperatures are also expected through mid-February in the Northeast, which is responsible for 80 percent of the country’s heating oil consumption.

Heating oil rose nearly 9 cents, to settle at $1.6380 a gallon.

In other New York trading, gasoline futures rose 8 cents, to settle at $1.5213 a gallon.

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Mexico’s oil output cools

According to lowem’s blog -> peakoil.com -> rigzone.com :

Daily output at Mexico’s biggest oil field tumbled by half a million barrels last year, according to figures released by the Mexican government. The virtual collapse at Cantarell – the world’s second-biggest oil field in terms of output at the start of last year – is unfolding much faster than projections from Mexico’s state-run oil giant Petroleos Mexicanos, or Pemex. Cantarell’s daily output fell to 1.5 million barrels in December compared to 1.99 million barrels in January.

Mexico’s troubles at Cantarell mirror the larger problems in the global oil market. Many of the world’s biggest fields are old and face decline, which can be sharp and sudden. Like other big producers, Mexico is struggling to make up the difference because new big fields are in harder-to-reach places like the deep waters of the Gulf of Mexico.

The field’s decline is expected to continue, if not worsen, this year, according to most estimates. That will subtract valuable oil from the world market, which is under pressure from rising demand by growing economies like China and India. It also means less oil headed to the U.S. from Mexico, which has long relied on Mexico as one of its top-three oil suppliers. “This is bad news for Mexico. The field is declining faster than even the government’s pessimistic scenarios,” says David Shields, an oil industry consultant in Mexico City who has been warning about Cantarell’s collapse for the past two years.

See also :

1. Will Mexico soon be tapped out?
2. Fiscal crisis for Mexico as oil starts to dry up
3. Second largest oil field dying

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Oil sands woes will be resolved, energy board says

According to Globeandmail.com -> Peakoil.com :

Calgary — Alberta will overcome the difficult challenges facing oil sands development, the head of the provincial energy regulator says.

“I firmly believe this will be very well organized and deliberately planned on the part of everybody to ensure this resource is extracted properly. We will make sure of that, because as an organization we can’t stand by and see it done otherwise,” Neil McCrank, chairman of the Alberta Energy and Utilities Board, said in an interview.

In November and December, the board approved two new oil sands projects but both times warned that rapid expansion of the oil sands was reaching a critical point.

With roughly $100-billion of work planned for the region over the next decade, problems are everywhere in Fort McMurray, from a severe housing shortage that has made the remote city one of Canada’s most expensive to extremely stressed health care facilities.

Ed Stelmach, the province’s new Premier, gave a speech in the city last week and cited some “statistics we’re not proud of” — the region has three times as many motor vehicle accidents per capita as the rest of Alberta and four times as many cases of sexually transmitted diseases.

In November, the energy board approved an expansion of Suncor Energy Inc.’s operations but took the unusual step of calling on the provincial government to address the problems, saying there was a “short window of opportunity” to improve infrastructure, from highways to hospitals.

In December, the board, in a joint decision with the federal government, approved Shell Canada Ltd.’s expansion plans but made a long list of recommendations to politicians and civil servants in Edmonton and Ottawa. The decision called the challenges facing Fort McMurray and the environment “critical,” suggesting other development applications for the oil sands could face higher hurdles.

“With each oil sands project, the growing demands and the absence of sustainable long-term solutions must weigh more heavily in the determination of the public interest,” a summary of the decision stated.

Mr. McCrank said he is confident the provincial government will respond appropriately. “They pay very close attention,” said Mr. McCrank, who has been chair of the regulator since 1998 and is likely stepping down within the next year.

“When this board makes specific recommendations, I’ve never seen the government not respond in some fashion. Now, they have their own issues to deal with — they have to prioritize what they’re dealing with — but they will pay close attention to recommendations from this board, and always have.”

He wouldn’t elaborate on what a “short window of opportunity” specifically meant.

“I can’t give you any more than what the board says in its decision and it said there was a short window of opportunity. I have to leave it at that.”

Proposed oil sands projects faced opposition from various groups last year, including the Regional Municipality of Wood Buffalo, home of the oil sands. Mayor Melissa Blake in November said Imperial Oil Ltd.’s Kearl oil sands proposal should be delayed so the region can catch up with development, repeating calls she made earlier in the year.

A decision on Kearl is expected in March.

Last year, former premier Ralph Klein admitted that “there wasn’t a plan” to deal with unprecedented growth in the oil sands, saying one was in development.

Mr. Stelmach has said dealing with growth is a top priority but hasn’t provided any details since becoming Premier in December.

Mr. McCrank said that despite the challenges, Albertans shouldn’t worry.

“The public should be confident … that their interest is well protected while this development is occurring, and that there won’t be anything happening that is not in the public interest,” he said.

-Looks like Canada Oil Sands is currently in rapid expansion and causing some concerns…this article however did not specify any energy problems from the oil sands. Do search for Oil Sands development and you will realised that the oil extraction process requires high amount of natural gas to extract the oil from the oil sand and water mixture. The high cost of natural gas will eventually make this operation not that profitable in the long run if oil price continue to plummet ….but the oil traders will be aware of it and stock up huge reserve when the oil began to be in higher demand later. Money shall be made…but consumer will suffer if there is any disruption of supply….

Well, oil fields had long been abandoned previously because their water cut % is too high and cost too much to extract to be profitable. Will Canada Oil Fields suffer the same fate? Not likely with high USA demand just beside Canada…will Oil Sands continue to produce oil until it totally run out?

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Crude oil pulls back to start the week

According to MarketWatch.com

Natural-gas prices rise as cold weather persists; heating oil erases earlier gain

NEW YORK (MarketWatch) — Crude-oil futures slipped in early trading Monday, pulling back from a two-week high, but natural-gas prices rose due to expectations of continued below-normal temperatures in the U.S. Northeast.

The March crude-oil contract was last down 51 cents at $54.91 a barrel in electronic trading. The contract closed at $55.42 a barrel on the New York Mercantile Exchange on Friday to cap a 3.8% rise for the week, the highest closing price seen since Jan. 9. Read more.


Edward Meir, an analyst at Man Energy, said that technically, crude appeared to be just bouncing within a larger downtrend, and that the current “mini-rally” did not appear to have much momentum. He said the outlook would likely depend on inventory data due out later in the week.


“Despite a less-than-inspiring technical picture, we think fundamentals will set the tone in the crude complex, especially once Wednesday’s inventory report comes out,” Meir said in a research note. “If we fail to see sizable draws this week in key categories after the recent cold spell, prices could retrace quite significantly.”


Meanwhile, February natural-gas advanced 8.5 cents, or 1.2%, to $7.260 per million British thermal units in electronic trading.


According to AccuWeather, the cold weather that gripped the Northeast last week will remain at least through the middle of the week, with temperatures below average from Boston down to Jacksonville, Fla.


In other energy markets, February heating oil was down 0.74 cents at $1.5840 a gallon, pulling back from a 3-week high of $1.6122 reached earlier in the session.

February reformulated gasoline futures slipped 1.29 cents to $1.4705 a gallon. - The Natural Gas Rally may become a norm in future… when the demand heats up in many countries.

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Murphy Oil Announces Natural Gas Discovery Offshore Deepwater Sabah Malaysia

According to Yahoo Finance

EL DORADO, Ark.–(BUSINESS WIRE)–Murphy Oil Corporation (NYSE:MURNews) announced that its Rotan #1 exploration well encountered significant natural gas pay in a single zone. The well reached a total depth of 7,024 feet and was drilled in 3,773 feet of water in Block H offshore Sabah, Malaysia.

“The results from Rotan #1 are very positive for this new play in Block H, and provide a strong beginning for us in 2007,” said Claiborne P. Deming, Murphy Oil Corporation President and Chief Executive Officer. “This is our fourth exploration well in Block H and our first discovery there. We have always believed in the potential of deepwater Sabah and have maintained a high and consistent level of exploration activity since 1999. Success in this new play demonstrates the tremendous opportunity in the area on which to build,” he further added.

Murphy, as operator, has an 80% working interest in Block H. PETRONAS Carigali Sdn. Bhd., a wholly owned exploration and production arm of PETRONAS, holds the remaining 20%.

The forward-looking statements reflected in this release are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. No assurance can be given that the results discussed herein will be attained, and certain important factors that may cause actual results to differ materially are contained in Murphy’s January 15, 1997 Form 8-K report on file with the U.S. Securities and Exchange Commission.

- Notice that the article never mention any estimates on the amount discovered and also the potential size of the gas field. Do remember to follow this news closely as the discovery may not mean immediate extraction until maybe few months to a year later.

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