INDUSTRY BRIEFS

Tankers

Mobil Corp. commissioned its second double hull very large crude carrier at Sumitomo Heavy Industries Ltd.'s Oppama, Japan, shipyard. The 280,000 dwt Raven, 317 m long and 58 m wide, can carry 2.2 million bbl of oil.

Labor

About 225 employees of 14 Norwegian drilling and other service/supply contractors went on strike May 31 after their demands for easier work schedules were rejected. Operations of Den norske stats oljeselskap AS (Statoil), Norsk Hydro AS, Saga Petroleum AS, Phillips Petroleum Co. Norway, and Amoco Norway Oil Co. are affected.

Spills

Marathon Pipeline Co.was charged with violations of the U.S. Migratory Bird Treaty Act related to a June 19, 1993, naphtha pipeline spill that killed wildlife in Macon County, Ill. The law carries a maximum penalty of a $10,000 criminal fine and/or 6 months imprisonment for each violation.

U.S. Transportation Department's Research and Special Programs Administration (RSPA) is distributing 1.4 million copies of an emergency response guidebook to police, fire, and other emergency units that might respond to chemical spills. The book identifies chemicals by number and name and discusses the nature of the hazard, detailed public safety response, protective clothing for cleanup, and first aid procedures for persons exposed to chemicals.

Pipelines

CMS Gas Transmission & Storage Co., Dearborn, Mich., and Heritage Gas Services LLC, Tulsa, formed Cherokee Gas Processing LLC, which acquired the Lucien gas gathering system and related assets in Oklahoma from Phillips Petroleum Co. unit GPM Gas Corp. Heritage will operate the venture and own 30% of it, with CMS holding 70%. The Lucien system consists of 380 miles of low pressure gas gathering pipelines and five compressor stations in Garfield, Logan, Noble, and Payne counties and a 10 MMcfd gas processing plant in Noble County.

Statoil completed the Haltenpipe gas pipeline from Heidrun platform in the Norwegian Sea to Tjeldbergodden in Central Norway. The line will carry gas from Heidrun field to a new methanol plant that is due to receive first gas in October. Two sections of the pipeline will be tied in during July, after which line fill preparations will begin.

Conama, Chile's environmental regulatory agency, asked a group led by NOVA Corp., Calgary, for more studies on a section of the GasAndes pipeline under construction to move gas from Argentina through the Andes to Santiago, Chile. Landowners near a 2.5 mile stretch of the line through the Cajon del Maipo Valley are protesting the line on environmental grounds, although Conama earlier approved the project (OGJ, Apr. 8, p. 28). NOVA said the dispute will have little immediate effect on the project.

RSPA issued a final rule changing various administrative practices in its pipeline safety program. The rule also makes minor changes in rules for gas detection, protective enclosures, and pipeline testing temperatures. RSPA said the changes will eliminate unnecessary or burdensome rules.

U.S. Federal Energy Regulatory Commission approved a $13.7 million project planned by Williams Natural Gas, Tulsa, to expand gas service to Springfield, Mo. Construction of the 28.2 mile extension of 20 in. pipeline is to be complete by November. Williams and City Utilities of Springfield last June completed negotiations to increase the city's contract take of 102 MMcfd by about 23 MMcfd. Williams also is evaluating another proposed expansion in Southwest Missouri it hopes to bring on line by winter 1997.

Exploration

Enron Oil & Gas Co., Houston, found more gas in Northwest Alberta's Wapiti area. Its Wapiti 6-4-68-7W6 wildcat, drilled to 7,700 ft, was completed and connected to a gathering system. It is producing 31 MMcfd. In addition to a 100% working interest in the discovery, Enron holds about 4,800 acres on trend with the strike and another 25,000 acres in the area. In 1995, Enron completed two other wells in the Wapiti area that are capable of producing a combined 10 MMcfd.

Oilsands

Koch Exploration Canada Ltd., Calgary, plans a $200 million (Canadian) project to increase production at its oilsands operation at Bonnyville, Alta. Koch will drill about 140 wells this year and build a second processing plant to increase output to 40,000 b/d from 14,000 b/d by 1998. Koch began the Reita Lake project in 1993 on leases it acquired from Suncor Inc. and Amoco Canada Petroleum Co. Koch uses cavity pumps to recover bitumen and sand for processing.

Imperial Oil Ltd. does not plan to immediately begin commercial development of its South Maskwa and Leming Lake heavy oil leases in Alberta's Cold Lake area. Imperial had planned to begin drilling 92 directional wells and four horizontal wells from five pads this year. Instead, it now plans a series of pilot tests for several years to deal with concerns over casing optimization. Alberta Energy & Utilities Board imposed more stringent surface casing requirements in response to concerns that casing failures could contaminate water supplies. Work is under way to ensure Imperial's Cold Lake production still will increase by a targeted 9,400 b/d.

Drilling-production

Amerada Hess Ltd. chartered from Transocean ASA, Tananger, Norway, the Transocean 8, Transocean Discoverer, and Kan Tan IV semisubmersible rigs. Transocean 8 will be upgraded to drill for 2 years West of Shetland beginning in spring 1997. Transocean Discoverer will drill for Amerada for 19 months beginning at once, and Kan Tan IV's current contract with Amerada will be extended another year.

Marathon Oil U.K. Ltd. let contract to McDermott Marine Construction Ltd., London, to carry out preliminary engineering of West Brae field development in the North Sea. West Brae will be a subsea satellite of Brae A platform, possibly in conjunction with nearby Sedgwick field operated by Enterprise Oil plc, London. Marathon hopes to receive development approval for West Brae in August, after which McDermott's work will form the basis of an engineering, procurement, construction, and installation contract.

BP Exploration Operating Co. Ltd. started production from South Magnus oil and gas field in the northern U.K. North Sea. The field, on Block 211/12a, was developed with a subsea well tied back to Magnus platform, 7 km north. Production started May 25 at 17,000 b/d of oil. South Magnus holds estimated oil and gas reserves totaling 26 million bbl of oil equivalent, almost one fourth of which is gas. Production is expected to plateau at 14,000 b/d and last 10 years.

Statoil let a $33 million contract to Kvaerner AS, Oslo, for a separation package. The unit will be installed on a production ship being built for development of Aasgard fields in the Norwegian Sea. The unit will have capacity to treat 200,000 b/d of oil as well as 595 MMcfd of associated gas for reinjection. Delivery is slated for Oct. 1, 1997.

Statoil U.K. Ltd. issued a letter of intent to Reading & Bates (U.K.) Ltd., Aberdeen, to charter J.W. McLean semisubmersible for drilling off western Ireland. The $60 million deal secures the rig for 19 months beginning in March 1997. Statoil will use the rig to appraise Connemara field, Ireland's only oil discovery, and drill two wildcats on other licenses. Statoil is considering developing Connemara with a chartered production, storage, and offloading ship (OGJ, May 20, p. 32).

Elf Exploration U.K. plc let contract to Santa Fe Drilling Co. (North Sea) Ltd., Aberdeen, for drilling additional development wells in Elgin and Franklin gas/condensate fields in U.K.'s Central North Sea area. Elf earlier let contract to Santa Fe to begin Elgin development drilling by yearend with the Galaxy 1 heavy duty jack up. The new contract, to begin in fourth quarter 1997, covers as many as eight wells in Elgin and six in Franklin. Elf hopes to receive Elgin/Franklin development approval by yearend, with first production slated for April 2000 (OGJ, May 13, p. 38).

Unocal Indonesia Co. started production from Seguni oil and gas field in the Mahakam Delta area off East Kalimantan. Current production is more than 6,700 b/d of oil and 9 MMcfd of gas from five completions. Production is expected to climb after Unocal adds two completions this month. The field, discovered in May 1995, lies in 105 ft of water about 2 miles northwest of Unocal's Sepinggan field. Unocal installed its proprietary stacked template structure over the discovery well, enabling early production and slashing development cost, excluding wells, to about $4 million vs. $10-17 million for conventional production systems.

DLB Oil & Gas Inc., Oklahoma City, closed its purchase of producing leases, mineral rights, and leasehold acreage, mainly in Oklahoma, from Amerada Hess Corp. for $35 million. Involved are 44 fields, nine of which DLB will operate, and 1,196 wells. Current production from the acquired interests net to DLB is about 820 b/d of oil and 7.8 MMcfd.

Petrochemicals Montell Technology Co. BV signed a license agreement for its Spherilene gas phase polyethylene technology with Brazil's Ipiranga Petroquimica SA. The technology will be used in a 130,000 metric ton/year capacity plant to be built at Triunfo, Rio Grande do Sul, Brazil, due on stream in fourth quarter 1998. The plant will produce linear low density and high density polyethylene and boost Ipiranga's polyethylene capacity at the site to 500,000 metric tons/year.

A gas leak at Lyondell Petrochemical Co.'s Mont Belvieu terminal near Houston ignited June 2, damaging piping and control systems. No one was injured, and the fire was extinguished in about 11/2 hr. Lyondell is studying options for feedstock and product deliveries as a result of the disruption to its operations. One of two olefins plants at Lyondell's nearby Channelview petrochemical complex is down for a scheduled turnaround, and the other is operating at slightly reduced rates. The polypropylene unit at its Bayport complex nearby has been temporarily shut down until alternate feedstock supply can be arranged.

Companies

Outtrim Szabo Associates Ltd., Calgary, agreed to provide engineering training and consulting services to a Chinese petroleum agency. Outtrim will give a 13 week training program in Calgary on reservoir evaluation, risk analysis, and other subjects. The agreement is in association with NOVA Gas International and D&S International Consultants Ltd., which have long term training contracts with Canada's foreign aid agency and the Research Institute for Petroleum Exploration & Development of China.

Mobil Oil Canada Ltd. will cut 142 jobs from its payroll of about 950 employees and contractors. The company has been selling and exchanging leases in western Canada and focusing more on East Coast interests such as Hibernia and Terra Nova oil fields and Sable Island gas fields.

Kyrgyzstan's Kyrgoil Corp. opened a head office in Calgary and will trade on the Toronto Stock Exchange. The company owns oil exploration, development, production, refining, and marketing assets in the former Soviet republic. Its operations are conducted through KPC, a joint stock company formed by Kyrgoil and Kyrgyzstan state oil company Kyrgyzneft.

Government

U.S. Minerals Management Service asked for public comment on regulations that should be eliminated or revised. MMS also updated actions it has taken on comments received from the public in response to similar notices published in March 1994 and March 1995.

Refining

Reliance Petroleum Ltd. appointed UOP Ltd. managing licensor for a 300,000 b/d grassroots refinery at Jamnagar, Gujarat, India. Bechtel France SA is managing contractor for the project, which also involves units to produce 1.4 million metric tons/year of paraxylene and orthoxylene. Other units include those for fluid catalytic cracking, CCR platforming, vacuum gas oil Unionfining, and diesel Unionfining, as well as sulfur and hydrogen plants.

U.S. Commerce Department's Foreign Trade Zones Board granted duty free status for some production to BP Oil Co.'s 221,000 b/d Alliance refinery near New Orleans and 121,000 b/d Toledo, Ohio, refinery.

Exports-imports

U.S. Commerce Department's Bureau of Export Administration issued a final rule setting licensing procedures for the export of Alaskan North Slope crude oil. The rule implements a law enacted last year (OGJ, May 22, 1995, p. 28).

LNG

Abu Dhabi Gas Liquefaction Co. signed a contract to supply 4.5 million metric tons of liquefied natural gas and 315,000 metric tons of liquefied petroleum gas to Tokyo Electric Power Co. in 76 shipments through March 1997.