January 25, 2012

Bitumen Shortage in South Africa

A shortage of bitumen  which is used to produce asphalt for road surfacing has affected about 35 SA National Roads Agency Ltd projects, in addition to other major road construction projects, including the John Ross Parkway upgrade in Richards Bay and highway construction in Durban.
The shutdown of the Sapref refinery in Durban for unexpected maintenance is set to exacerbate SA’s bitumen shortage, further delaying construction and pothole repairs.Bitumen is a by-product of oil refineries and is used to produce asphalt for road surfacing. But due to high demand, in addition to planned and unplanned shutdowns of oil refineries, the bitumen shortage has worsened. 
There have been bitumen supply constraints since the World Cup construction boom. Up to 35 SA National Roads Agency Ltd (Sanral) projects have been affected by the shortage, in addition to the John Ross Parkway upgrade in Richards Bay.
“Sapref’s shutdown is certainly going to have an impact and will make the current bitumen supply situation worse,” said Saied Solomons, chief executive of the SA Bitumen Association (Sabita).
“That’s the biggest oil refinery in the country… The Enref (Engen) refinery in Durban also only recently came back on line after the fire and maintenance shutdown late last year. However, there is very little new bitumen coming onto the market at the moment.
“The situation is dire and is significantly impacting on the industry. It is not just big construction and asphalt companies that are being affected but small companies too, which is having a ripple effect on other business sectors.”
Solomons said the association was in talks with refineries, as well as the departments of Transport and Energy, about solutions to the problem.One costlier alternative was to import bitumen, and some construction and asphalt companies had banded together to import about 4 500 tons recently.
“South Africa uses roughly 420 000 tons of bitumen annually now… It is difficult to say what the supply shortfall is at the moment. However, what I can say for sure is that the demand/supply at the moment is extremely tight,” said Solomons.
Brian Henwood, consulting engineer at Henwood and Nxumalo, which is working on the John Ross upgrade, said the situation was worrying.“The bitumen shortage has had a huge impact on business in the road-building industry, as all road projects have experienced problems because of the lack of supply.
“The bitumen shortage could start impacting on the sections of the new east-bound carriageway that are nearing completion,” he said.
Last month, in a written response to questions by the DA in Parliament, Transport Minister S’bu Ndebele said more than R1 billion worth of work would not be able to be completed by Sanral contractors in the 2011/12 financial year.
“Sanral, the Department of Transport’s roads agency that accounted for 70 percent of the road bitumen usage in South Africa during 2010, is severely affected by the shortage of bitumen… Various steps have been taken to address the short, medium and long term implications of the shortage of bitumen,” said Ndebele.
“The Department of Transport and Sanral have been actively engaging with the Department of Energy in an attempt to highlight to them the various problems related to the supply of bitumen from the existing refineries in South Africa and to find solutions for the medium to long term.
“Sanral has also been actively engaging with the road construction industry to directly import bitumen from overseas to overcome the local short-term supply constraints.

By Suren Naidoo and Marie Strachan
Source -   http://www.iol.co.za/mercury/refinery-closure-fuels-bitumen-crisis-1.1215263

China Funds Pakistan Road Works

ISLAMABAD: National Highway Authority (NHA) has signed a contract with M/s China Road and Bridge Corporation for realignment of Karakorum Highway. Application for loan is under process with Economic Affair Division (EAD). Work will be completed in 2 years after commencement subject to availability, release of funds.

In a written reply, the Senate of Pakistan was informed here on Tuesday that NHA was allocated Rs 36.418 billion (local currency component) in PSDP 2010-11. Due to 50 percent cut on overall PSDP, the allocation was reduced to Rs 18.500 billion. To-date, Rs 17.362 billion has been released by Ministry of Finance. Funds to NHA are released as single line budget and not province or project-wise. Total amount required to complete ongoing projects is Rs 371 billion. As funds are not released on time, projects suffer from time and cost overrun.

Province-wise allocation for NHA projects included in PSDP 2011-12 is some Rs 39.900 billion that has been allocated for provinces, including Rs 33.531 billion local and Rs 6.369 billion foreign funding. Punjab Rs 11,067 local and 1,179 foreign component with total Rs 12.245 billion. Province of Sindh Rs 7.250 billion local and Rs 3.020 billion foreign funding making a total of Rs 10.270 billion. Khyber Pukhtunkhwa Rs 6.307 billion local and Rs 330 million foreign funding with a total of Rs 6.637 billion. In Balochistan Rs 8.092 billion local and Rs 695 foreign funding with a total of Rs 8.787 billion. Gilgit-Baltistan Rs 815 million local, Rs 1.145 billion foreign funding with a total of Rs 1.960 billion.

A massive landslide occurred on Karakoram Highway (KKH) across Hunza near Attaabad on January 4, 2010. The debris 86 huge boulders blocked River Hunza in a length of around 500 m. The blockage has created a lake, submerging 24 km length of KKH.

The contract for lowering the water level of the lake by 30m has been awarded to Frontier Works Organisation (FWO) by P&D Division. If this mission is achieved, around 7 km road length will be retrieved. FWO has so far managed lowering the lake level by 4m and has indicated that the task is likely to take next 2 to 3 low flow seasons (winters).

Meanwhile, NHA signed a contract with M/s China Road & Bridge Corporation on December-2010 for realignment of KKH. Application for loan is under process with EAD.

The work on Lowari Tunnel is halted and contract between NHA and contractor is stand terminated with effect from June 3, 2011, because the contractor issued a notice due to non payment of dues, However, the notice was challenged by NHA “The Engineer” has declared both the notices as in fractious. Contractor further issued the notice for Arbitration to NHA. He has proposed an amicable settlement, whose proceedings are in progress. Estimated Cost for the Project has been revised to Rs 18.132 billion With expected time of completion of 4 years Revised PC-I has been approved by ECNEC in its meeting held on November 11, 2011. Rs 145.3 million has been released, so far in current financial year that included Rs 84.15 million to contractor and Rs 25 million to consultant.

Roads constructed by NHA are based on international standard “American Association of State Highway and Transportation Officials (AASHTO) and comparable to any world class roads. Motorways like M-1, M-2 and M-3 are good examples in this regard. NHA has introduced many new technologies that cater both conventional, and nonconventional raw materials for maintenance and construction of roads for the first time in Pakistan on national highways and motorways: Hot and Cold Recycling of Asphalt Concrete Pavements, Polymer Modified Bitumen (PMB), Crumb Rubber Modified Bitumen (CRMB), Stone Mastic Asphalt Technology (SMA), etc. Incorporating a new technology or non-conventional raw materials for road construction needs careful evaluation of various parameters such as performance and costs. Therefore, NHA is employing various new technologies through test sections for monitoring and evaluation. During FY 2010-11 an amount of Rs 19.75 billion was approved for carrying out routine maintenance works and completing ongoing, committed rehabilitation and periodic maintenance works. staff report

 * It is based on 85% funding in foreign currency from Chinese side, 15% in local currency by govt

January 19, 2012

Canadian Oilsands- What is the Impact for export?

Is sending raw unprocessed bitumen an urgent matter?

By John Phair
I’m writing in response to Ethical Oil’s ads in the last two issues of the Lakes District News.
These ads, part of a larger ongoing campaign, have appeared in newspapers throughout the Northwest.
I am not disturbed that they were published. Our newspapers need to function and to encourage discourse in our communities.

But I am insulted because the producers seem to gamble that I, my family, friends and neighbours are either stupid, too apathetic or too busy to engage, or otherwise chose willfully to ignore some now obvious facts.
Reminiscent of past marketing by such lobbies as the tobacco industry, among others, these ads sow confusion, disinformation, division, diversion, and doubt.

These ads point out that special interest groups are using foreign funds to do their work, to ensure that air and water and food will be available for the next generations.

It is now common knowledge that this funding is only a small portion of these organizations’ budgets, and is minuscule compared with the funding poured into promoting these pipelines, tankers and tar sands.
We now know that Enbridge has amassed $100 million for its proposal campaign, from Cenovus Energy Inc., MEG Energy Corp., Nexen Inc., Suncor Energy Marketing Inc., a  subsidiary of Suncor Energy Inc., Total E&P Canada, the domestic arm of French giant Total SA and Sinopec of China, among others.
Foreign investors in Canada’s oil industry include China, Thailand, Norway, France, Korea and the United States.

I am disgusted that Enbridge and our government presume we will accept the latter as okay but the former as radical or worse.  bI am deeply offended that these 'Canadian' companies expect me to believe that this and related projects are in the best interest of Canadians, all the people who live here.
I sincerely doubt that sending raw unprocessed bitumen to refineries in Imperial China is an urgent matter of Canada's national interest.

Source - http://www.ldnews.net/opinion/letters/137519643.html