BP Amoco and SINOPEC plan world-scale petrochemicals complex

BP Amoco PLC announced the signing in London on Oct. 20 with China Petrochemical Corp. (SINOPEC) of a framework agreement to undertake a joint feasibility study for a world-scale ethylene cracker and derivatives complex in Shanghai.

The company said the project proposal for a 650,000 tonnes/year ethylene and derivatives complex was approved by the Chinese government earlier in the month, with full support from the Shanghai municipal and Zhejiang provincial governments.

The proposal was first mooted in 1996, when SINOPEC and its Shanghai Petrochemical Co. affiliate signed a letter of intent to consider a 50/50 joint venture with the former BP Chemicals. In July 1997 SINOPEC and BP completed a pre-feasibility study and submitted a $2.5 billion project proposal to the government.

BP Amoco and SINOPEC aim to complete the joint feasibility report, negotiate a joint venture contract, and complete other commercial agreements by the end of 2000. The JV would be established by the end of 2001 with a view to completing construction of the cracker and derivatives plants by 2005.

Bryan Sanderson, chief executive of BP Amoco Chemicals, said: "Today's signing of the agreement further develops the cooperative relationship between SINOPEC and BP Amoco, based on the successful cooperation in the Yangtze River Acetyls Co. Ltd. (YARACO)."

SINOPEC Vice President Wang Jiming added, "The Shanghai cracker project will contribute significantly to SINOPEC's aim of building several million-tonne ethylene sites in China in stages after year 2000 and to the economic development of both Shanghai municipality and the Yangtze River Delta."

New projects

Lukoil and Conoco Inc. announced that their proposed Northern Territories Block project, which will be based around development of the giant Yuzhno Khilchuyu field in the Timan-Pechora region, passed its third and final reading by the Duma.

The project will now pass into legislation on government's list of fields eligible under PSA deals. Conoco sees the project, which is thought to have potential reserves of 1.3 billion bbl of oil, as a means to build on its earlier Polar Lights development.

John Capps, president of Conoco International, said: "This is a significant achievement toward our goal of joint development of the oil and gas reserves in the Northern territories. Passage by the Duma gives us a formal right to begin negotiations on a production sharing agreement with the state."

Repsol-YPF SA disclosed a large oil and gas find on the Caipipendi block in southern Bolivia. The operator said the Margarita-X3 well flowed 2 million cu m/d of gas and 2,300 bo/d from one formation.

Drilling has not yet finished, and Repsol-YPF said it expects to discover further productive layers. The company said estimated reserves for the current find amount to more than 300 million boe, but that this figure could double before exploration work is completed.

License interests are: operator Repsol-YPF 37.5%, BG PLC 37.5%, and Atlantic Richfield Co. 25%. "The discovery," said Repsol-YPF, "has great economic relevance because of its proximity to the Bolivia-Brazil gas pipeline, which will transmit Bolivian gas to the Brazilian markets."

Ireland's Seven Heads oil and gas find, which lies 32.5 km west southwest of the Kinsale Head has field off the south coast, where Marathon Petroleum Ireland Ltd. is operator, is being mooted as a development prospect 25 years after it was found by Esso Ireland Ltd.

Aberdeen's Ramco Energy PLC and fellow independents Duke Engineering & Services Ltd., Island Petroleum Developments Ltd., and Sunningdale Oils (Ireland) Ltd., secured an 18-month 'licensing option' to study existing data on the find, which lies in 330 ft of water.

Ramco and partners will evaluate four wells drilled by Esso and Marathon during 1974-90, each of which was said to have recorded significant shows of oil and gas. Ramco reckons that much has changed since the strike, and that Ireland now represents a robust market for gas. The company will focus on the evaluation, estimation, and deliverability of the Seven Heads gas reserves.

Project focus: Germany marks completion of gas pipelines

Germany's massive gas infrastructure became even more formidable with the completion of two new pipelines, one bringing gas from Norway and another linking an import point for Russia gas to central Germany.

Ruhrgas AG, Essen, marked the end of commissioning of the Europipe II gas trunkline on Oct. 1. This 660 km long pipeline was built by a group of Norwegian gas exporters, led by state firm Statoil AS, to deliver gas from the Karstø processing plant on the coast of mid-Norway to Dornum, Germany,

Ruhrgas is Europe's largest importer of Norwegian gas, with total imports amounting to 12 billion cu m in 1998. The Europipe II link will be used to carry most of Ruhrgas' imports, as Norway's exports to Germany grow from 19% of German demand in 1998 to 30% in 2010.

Ruhrgas receives the gas at Dornum and transports it to the main Ruhrgas grid through the Norddeutsche Erdgas Transversale (NETRA) pipeline, extended this year with a 49 km link from Etzel to Dornum. NETRA is operated by a joint venture of Statoil, Norsk Hydro AS, BEB Erdgas & Erdol GMBH, and Ruhrgas.

Meanwhile, Wingas GMBH, Kassel, Germany, completed the JAGAL gas pipeline which carries gas from Frankfurt am der Oder, where the border link to the Russian YAMAL pipeline is located, to Rückersdorf 336 km away. At Rückersdorf, which lies due south of Leipzig, the JAGAL pipeline meets the STEGAL pipeline, part of Wingas' north German gas grid.

The JAGAL pipeline has the capacity to deliver 28 billion cu m of gas from Russia's Yamal peninsular to, which Wingas claims is equivalent to one quarter of Germany's annual demand. Wingas is a joint venture of German distributor Wintershall AG and Russian producer Gazprom.

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