Korean Gas Corporation (KOGAS) will invest approximately 400 billion won (SR1.27 billion) to build an energy plant in Saudi Arabia. Sources at the Saudi economy ministry and KOGAS said a preliminary deal with the Saudi Arabian government was signed on Nov. 2 for the plant in Jubail, which would have an annual capacity of 300,000 tons of dimethylether (DME) from 2013, a newspaper quoting Alternative Fuel Technologies Inc. (AFTC) reported. DME is mainly made from the synthesized gas by cracking natural gas, coal and biomass, and is considered cheaper and cleaner than liquefied petroleum gas. AFTC CEO James C. McCandless said “I am not surprised that KOGAS would spend over $330 million to build a DME plant of this size, as we have been working with KIER (Korean Institute for Energy Research) for several years and we know they see a bright future for DME. We have several installations in the country that have been running successfully for some time now. Asia continues to be a hotbed for growth in the DME industry. I am excited to ship DME fuel pumps to our Korean customers and look forward to a longstanding mutually rewarding relationship. I believe this will lead to widespread adoption of our company's DME fuel systems throughout Asia and the world.” DME is a new ultra-clean diesel fuel replacement that can be produced from abundant resources. These include natural gas, landfill methane, coal and biomass. At current oil prices, DME can be produced and distributed at less than 1/2 the cost of conventional fuel. When burned in a diesel engine, all soot emissions are eliminated and NOx emissions are lowered dramatically without the use of expensive exhaust after-treatment devices. AFTC is a research & development organization engaged in the design, development and prototype manufacturing of advanced fuel systems for use with a new alternative fuel - dimethyl either (DME). AFTC has developed practical, low-cost fuel injection equipment for DME fueled vehicles and currently provides complete DME fuel systems for testing and research purposes in addition to retrofit systems that can be used with most diesel engines. The company's ultimate goal is series production of DME fuel systems for the global automotive market by 2011. Meanwhile, US oil major Chevron has started the third stage of testing a improved oil recovery technique in the neutral zone between Saudi Arabia and Kuwait, it said on Wednesday. Chevron has been testing the impact of steam flooding in the Wafra oilfield to help boost output of heavy oil. Steam raises the temperature below ground and loosens up crude that is otherwise difficult to pump. The $340 million pilot project (LSP), is the third and “final test in a nearly 10-year staged assessment to determine the technical and economic viability of thermal recovery projects in the Eocene heavy-oil carbonate reservoir,” Chevron said in an e-mailed statement. This stage, which achieved first-steam injection in June, would prove if Chevron can use this technology in full-field development. “Chevron is applying new technologies to free-up in commercial quantities the potential of extra heavy oil from carbonate,” George Kirkland, executive vice president for Global Upstream and Gas at Chevron said. “It is a potential in the onshore Partitioned Neutral Zone and elsewhere measured in billions of barrels of new energy resources, billions of dollars in investments and revenues,” Kirkland added. This stage, that would last for three years includes 16 injection wells, 25 producing wells, 16 observation wells and installing water treatment and steam generation and distribution facilities, the statement added. Saudi Arabia and Kuwait share an estimated 550,000 bpd output from the Neutral Zone. Saudi Arabia has extended Chevron's concession in the neutral zone to 2039.
