Petrochemicals Germany's BASF AG will join with Sinochem and Yangtze Petrochemical Corp. to build a petrochemical complex at Nanjing, China. The complex will include a naphtha cracker with 600,000 tons/year of ethylene capacity, arene and butadiene extraction, synthetic gas production, and a power plant. The project's cost is estimated at about $3.5 billion.
Mobil Corp. will decide this month whether it will build a world-class petrochemical complex at Sing apore, pending final results of a 1-year feasibility study. Mobil will not base the decision on plans under way by Exxon Corp. to build a $2 billion Singapore petrochemical complex. Whether or not it builds the entire complex, Mobil is expected to spend more than $780 million to expand its Singapore aromatics plant. It also is finishing a $200 million base lubes plant for planned start-up by or before yearend.
Saudi Chevron Petrochemical Co. (SCPC), Riyadh, signed a $305 million loan agreement covering part of the project cost for a $650 million petrochemical plant at Jubail (OGJ, Apr. 14, 1997, p. 32). The plant, slated for completion in mid-1999, will produce 482,000 metric tons/year of benzene and 220,000 tons/year of cyclohexane, exporting 60-70% of output initially to markets in northwestern Europe and Asia. SCPC, a venture of Chevron Chemical Co. and Saudi Industrial Venture Capital Group, is Saudi Arabia's first privately owned petrochemical venture.
Saudi Methanol Co. let contract to Japan's Mitsubishi Heavy Industries Ltd. to build a 2,500 metric ton/day methanol plant at Jubail for planned start-up in April 1999. The plant will use a new high-conversion methanol synthesis process developed by units of Mitsubishi. Saudi Methanol is a joint venture of Saudi Basic Industries Corp. and Japan Saudi Methanol Co.
ARCO Products Co., Long Beach, Calif., let contract to Jacobs Engineering Group Inc., Pasadena, Calif., for engineering, procurement, and construction liaison of a world-scale, $300 million grassroots polypropylene complex at ARCO's Carson, Calif., refinery. The 400 million lb/year complex is slated to come on stream in first quarter 1999.
Refining
Den norske stats oljeselskap AS (Statoil) reached a processing deal with the state-owned operator of Whitegate refinery near Cork, Ireland. The deal will guarantee product supplies to Statoil's 350 retail outlets in Ireland. Statoil will deliver 14,000 b/d of crude for refining, or roughly 25% of the plant's capacity. Volumes can be increased later. Statoil will now close a small tank farm near Whitegate.
Companies
Halliburton Co. will acquire Numar Corp., Malvern, Pa., in a stock-for-stock transaction valued at about $360 million. Numar designs, manufactures, and markets a proprietary magnetic resonance image logging tool. Halliburton believes the technology is a breakthrough in wireline logging.
Austria's OMV AG acquired a 27.5% interest in onshore Sudan Block 5A. A 1,350 line-km seismic survey is planned for later this year. Nearby licenses are believed to hold proven reserves of 600-800 million bbl and will be served by a 250,000 b/d capacity pipeline to Port Sudan, targeted for completion by yearend 1999. Sudanese state firm Sudapet will take a 5% share in Block 5A when it approves the exploration and production-sharing agreement. Other interests then will be operator International Petroleum Corp. 40.4%, Petronas Cariga* Sdn. Bhd 28.5%, and OMV 26.1%.
Gulf Canada Resources Ltd., Calgary, launched a $426 million (Canadian) takeover bid for CS Resources Ltd., Calgary. CS has been considering a strategic alliance with another partner and soon will disclose an agreement. Gulf is seeking at least a 66% interest in CS, which has substantial heavy oil properties in northern Alberta. Gulf wants to become a prominent player in oilsands and heavy oil. It acquired the U.K.'s Clyde Petroleum plc earlier this year (OGJ, May 12, 1997, Newsletter).
Brown & Root Pty. Ltd., a unit of Halliburton Co., offered to pay about $34 million cash for the rest of Australia's Kinhill Holdings Ltd. it doesn't already own. Kinhill is one of the largest engineering concerns in the Asia-Pacific region. Kinhill shareholders will have 1 month to accept the offer of $1.25/share for all outstanding shares.
Italy's treasury set June 23-27 for the third public share offering of stock in the national energy company ENI (OGJ, June 2, 1997, p. 40). The offering is planned at 1 million shares, or 12.5% of the group's capital, but it may be expanded to 14.4% if demand warrants, with a 51% cap on maximum company shares to be sold. The treasury expects to net about $5.9 billion from the offering. A public referendum June 15 may abolish the state's "golden share" in ENI.
Union Pacific Resources Corp. will pay $180 million, including assumed debt and other obligations, to acquire Highlands Gas Corp., Englewood, Colo. Highlands has three gas processing plants with 117 MMcfd total capacity in the Permian basin of West Texas and southeastern New Mexico, five gas gathering systems totaling more than 700 miles, and another 400 miles of pipeline that can move either gas or liquids, all located near UPR's production. The deal is expected to close in August.
Power
Enron Europe Ltd. and Italian national utility ENEL signed a non-binding letter of intent to form a 50-50 joint venture company to own as much as 5,000 MW of power plant capacity, now owned by ENEL, to supply European customers. The plants would include single-cycle oil and gas-fired plants, which would be upgraded to combined-cycle, gas-fired plants. Enron is expected to be fuel manager for the joint venture and provide risk management services as Italy's market liberalizes. The newly formed company would sell power to ENEL until Italy's government authorizes the direct sale of power to end users.
Exploration
Chevron Corp. signed an agreement with China National Petroleum Corp. to explore a 695-sq mile tract in the Sheng* field complex in Shandong province, about 200 miles south of Beijing. The complex is China's second largest producing complex, with output of about 650,000 b/d of oil. Chevron will explore zones beneath existing production and hold a 100% interest during the exploration phase.
Elf Exploration Inc. plans a second well next month to confirm commerciality of its first deepwater Gulf of Mexico find, Viosca Knoll 823-2. Drilled to 13,312 TD, the discovery well tapped 376 ft of hydrocarbon-bearing sands and during an extended drill stem test flowed 22.7 Mcfd of natural gas and 1,816 b/d of oil through a 38/64-in. choke.
Elf Petroleum Norge plans to begin seismic work this summer on its two exploration licenses in the western Barents Sea (OGJ, May 26, 1997, p. 28). Elf will operate and hold a 30% interest in one 1,670-sq km exploration area and is a 10% partner in a seismic survey license covering 4,670 sq km.
Drilling-production
Norske Shell AS let a frame contract to Aker Maritime AS, Oslo, for modifications to Draugen platform in the Norwegian Sea. The 3-year contract, with options to extend for another 4 years, is expected to earn Aker about $100 million. The work includes engineering, construction, and installation for Draugen upgrades, as well as planning satellite field developments.
Dragon Oil plc, London, will offer a rights issue to raise £65 million ($135 million), to fund exploration and development on Block II off Turkmenistan. A field on the block is producing 6,200 b/d of oil. Dragon hopes to boost output to 75,000 b/d during the next 5 years. Dragon claims to have hiked reserves to 165 million bbl of oil equivalent (boe) from 48 million boe since it took over the field last year.
TransTexas Gas Corp., Houston, will begin an accelerated development program in Bob West North field by month's end (OGJ, June 9, 1997, p 25). The $50 million, 24-well program features drilling eight wells from each of three new surface locations, designed to add 150 MMcfd of gross output by Jan. 31, 1998.
Angola's state oil company Sonangol and partners let two engineering and procurement contracts valued at $50 million each to Brown & Root Energy Services. One contract involves a drilling-production platform, remote flare structure, and liquid, gas, and flare pipelines to be installed in 385 ft of water in the Cabinda B North extension off Angola. The second project involves water injection equipment for the Cabinda A waterflood project, designed with initial capacity of 260,000 b/d of water, expandable to 390,000 b/d.
Iran and Oman are discussing joint development of Bukha-Henjam oil field, which straddles territorial waters off both nations. By early July, a task force is expected to recommend procedural, financial, and legal issues for the governments to address in a final agreement.
Tankers
South Korea's Daewoo Heavy Industries Co. Ltd. signed contracts worth $470 million to build crude oil tankers. Contracts are for two 300,000- dwt tankers together worth $170 million for Euronav Luxembourg SA and five 158,000- dwt tankers worth a total $300 million for National Iranian Tanker Co.
Pipelines
Northwest China's Tarim and Turpan-Hami oil fields are now connected by a 482-mile pipeline slated to begin operation late this month. Ultimate throughput capacity is pegged at 200,000 b/d. It originates at the Tarim fields' production center at Korla in the west and extends to the Turpan-Hami fields' production center at Piqan in the east. The $2.2 billion project began in 1995.
Norway's Den norske stats oljeselskap AS (Statoil) submitted plans to the Ministry of Petroleum and Energy to install and operate pipelines to tie Heidrun and Norne field into the export riser base for the Aasgard gas trunkline. The Heidrun line will be 121 km long and is expected to cost $130 million, while the 37-km Norne line is budgeted at $100 million.
PanEnergy Corp., Houston, received nominations for more than the 500 MMcfd in capacity nominations it sought for the proposed Excelsior and Spectrum gas pipelines from Chicago to eastern U.S. markets (OGJ, Mar. 31, 1997, p. 38). The projects create new systems by connecting existing pipelines with expansions to new areas. PanEnergy plans to hold another open season soon to take offers for release of capacity from existing pipelines for the projects.
U.S. Federal Energy
Regulatory Commission approved a plan by KN Energy Inc., Lakewood, Colo., for the 900-mile Pony Express natural gas pipeline from Wyoming to Kansas City, Mo. (OGJ, Sept. 9, 1996, p. 32). The pipeline will start up in August with 60 MMcfd initial capacity, to be expanded to about 225 MMcfd by October.
FERC issued a final environmental impact statement to Northern Border Pipeline Co., Omaha, for its proposed $837 million, 1.2 bcfd system expansion to serve Chicago (OGJ, Sept. 30, 1996, Newsletter). Northern Border let contract to Gulf Interstate Engineering Co., Houston, to design, engineer, and build compression stations for the 390-mile extension to its 969-mile system that now connects the Montana-Canada border to Iowa. The expansion is slated to come into service Nov. 1, 1998.
Transcontinental Gas
Pipe Line Corp., Houston, a unit of Tulsa-based Williams Cos., received nominations from more than 20 shippers exceeding the 1 bcfd level the company seeks for its planned MarketLink system expansion to bring more Rocky Mountain and Canadian gas to eastern U.S. markets. Transco plans to finalize the design and file an application with FERC this year for a targeted 1999 service date.
Nova Gas Transmission Ltd., Calgary, filed an annual plan with the Alberta Energy and Utilities Board that describes more than $1.4 billion (Canadian) in gas pipeline expansions through 2000, with total new capacity exceeding 2.25 bcfd. Various segments of the expansion would cross Alberta to provide new western Canadian gas supplies timely access to growing North American markets.
Canada's National Energy Board set dates for two pipeline-related hearings. The hearing for an Interprovincial Pipe Line Inc. (IPL) bid to reverse its Line 9 crude oil line from Montreal to Sarnia, Ont., will begin Aug. 5 in Calgary. A second phase of the hearing is set for Aug. 11 in London, Ont. IPL estimates project costs at $89 million, with an in-service date of Apr. 1, 1998. Intervenors must notify the board by June 19. A hearing on Westcoast Energy Inc.'s gathering, processing, and mainline transmission tolls will start June 23 at the Landmark Hotel in Vancouver, B.C.
Gas marketing
Columbia Gas System, a unit of Columbia Energy Services Corp., Pittsburgh, will pay $14.75 million for Penn Union Energy Services LLC, the marketing arm of Pennzoil Co., Houston. PennUnion markets an average 1.5 bcfd of natural gas; the combined firms will market more than 3 bcfd. The deal is slated to close by June 30.
Copyright 1997 Oil & Gas Journal. All Rights Reserved.