INDUSTRY BRIEFS

Oct. 27, 1997
BP Australia joined the list of companies interested in participating in a proposed petrochemical complex centered on a 450,000 metric ton/year ethylene plant in the Pilbara region of Western Australia. Shell International Chemicals Ltd. and Dow Chemical Co. unveiled a $1 billion (Australian) joint proposal for such a complex last month (OGJ, Oct. 20, 1997, p. 34). Other interested companies include ICI Australia Ltd., Melbourne, and Westfarmers Ltd., a Perth agricultural/petrochemical group.

Petrochemicals

BP Australia joined the list of companies interested in participating in a proposed petrochemical complex centered on a 450,000 metric ton/year ethylene plant in the Pilbara region of Western Australia. Shell International Chemicals Ltd. and Dow Chemical Co. unveiled a $1 billion (Australian) joint proposal for such a complex last month (OGJ, Oct. 20, 1997, p. 34). Other interested companies include ICI Australia Ltd., Melbourne, and Westfarmers Ltd., a Perth agricultural/petrochemical group.

Phillips Petroleum Co.
started up a 440 million lb/year high-density polyethylene unit at Pulau Ayer Merbau, Singapore. The plant is a joint venture of Phillips 50%, Singapore Economic Development Board 30%, and Sumitomo Chemical 20%.

Pipelines

Energ!a Mayakan SRL de CV, a venture of Calgary's TransCanada Pipe- Lines Ltd., Bechtel Corp.'s International Generating Co. unit, and Mexico's Gutsa Construcciones SA, received from Mexico's Comisi?n Reguladora de Energ!a a permit to build and operate a natural gas pipeline to supply customers in the Yucatan Peninsula for 30 years. The $260 million, 700-km pipeline will originate at Ciudad Pemex, Tabasco, and deliver gas to industrial customers in Campeche, Merida, and Valladolid (OGJ, Oct. 6, 1997, p. 34). Construction is to begin in 1998, with initial deliveries of 260 MMcfd slated to start in late 1999.

Indonesia's Risjadson Group
let a $60 million turnkey contract, on behalf of operator Pertamina, to a unit of South Korea's Halla Group to build a 139-km oil pipeline system from Balikpapan to Samarinda, East Kalimantan. The project will include 26 pump stations, 12 oil storage terminals, and a jetty for 3,500-dwt oil tankers. Halla Engineering & Construction Corp. will begin construction next month, with completion scheduled for November 1999.

Partners
in the Viking Voyageur gas pipeline project revised plans for the 775-mile pipeline, which will extend from Emerson, Man., to the Joliet, Ill., area. The application submitted to the U.S. Federal Energy Regulatory Commission will be for a 42-in. line, rather than the planned 36-in. line. The change increases line capacity to 1.4 bcfd from 1.2 bcfd. Field work on the line began early this year, construction is expected to begin early in 1999, and first gas delivery is slated for November 1999. Partners are Northern States Power Co., TransCanada PipeLines Ltd., and Nicor Inc. (OGJ, Aug. 25, 1997, p. 29).

Refining

Maintenance of Nigeria's 110,000 b/d Kaduna refinery has been postponed 3 months to January 1998. The troubled refinery shut down in July following the complete breakdown of all its units. As a result of the unplanned shutdown, flare gases are trapped in equipment throughout the refinery, making work dangerous.

Farmland Industries Inc.
signed a letter of intent with BOC Gases, Murray Hill, N.J., to purchase high-purity oxygen and nitrogen for its 110,000 b/d Coffeyville, Kan., refining/petrochemical complex. BOC will build, own, and operate a 1,600 ton/day air separation unit at the refinery. Start-up is scheduled for 1999. Farmland will use the oxygen in a planned coke gasification unit. The nitrogen will be fed, along with hydrogen from the gasifier, to an ammonia synthesis unit.

Conoco Ltd.
licensed the Resulf-MM tail gas treating technology of TPA Inc., Dallas, for the No. 1 sulfur plant at its Humber refinery in South Killingholme, U.K. The process will boost sulfur recovery to 98%. Modifications to the upstream two-reactor Claus unit and installation of the Resulf-MM system will give the refinery two trains, each capable of fulfilling 100% of the refinery's sulfur removal requirements. Start-up is planned for first quarter 1999. The 200,000 b/sd refinery produces fuels, premium grades of petroleum coke, and petrochemical feedstocks.

Exploration

Gazprom will pay 75% and Statoil 25% of the cost to explore Medyn oil prospect, 1 km off northern Russia in the Pechora Sea. Their first joint venture in the area was Varadney oil prospect-30 km from Medyn-where the Murmanskaya jack up recently tested hydrocarbons from a well in 10 m of water.

Trinidad Exploration & Development Co. Ltd.,
San Fernando, Trinidad and Tobago, completed the first of three wells planned to target Pliocene prospects on Trinidad's southwestern peninsula. The Bonasse-1 well cut three pay zones at 300, 800, and 1,300 ft. The drilling rig has been moved to drill Bonasse-2 well, but a completion rig will be moved to Bonasse-1 to run a production test.

CACT Operators Group
found more oil in the South China Sea's Pearl River Mouth basin. On test, the Huizhou 26-2-1 well in 364 ft of water flowed 7,566 b/d of 39-48° crude oil from three zones at 10,988 ft. The well was the first drilled after a recent 3D seismic survey. CACT, the biggest producer off China, is composed of China National Offshore Oil Corp., Agip SpA, Chevron Overseas Petroleum Inc., and Texaco Inc.

Great Southern Oil NL
is undertaking a share offering to raise $5.5-8 million (Australian) to fund exploration of four permits in the Gippsland basin off Victoria, Australia. The areas, operated by Amity Oil NL, Perth, are on the fringes of the Bass Strait oil and gas fields; they have not been surveyed with advanced seismic techniques. Amity plans to spud the first well, Broadbill 1, on Permit Vic/P36 in the southwestern corner of the basin in first quarter 1998.

Companies

Phillips Petroleum Co. will acquire Gulf Canada Resources Ltd.'s assets in the Zama-Virgo basin of northwestern Alberta for $230 million (Canadian). Gulf also will receive a 100% working interest in Phillips's Colville field in western Saskatchewan. Colville, adjacent to Gulf's South Colville field, has proven reserves of 20 million bbl of heavy oil and produces 3,000 b/d. Zama-Virgo has proven and probable reserves of 34 million bbl of liquids and 222 bcf of natural gas. Current production is 7,500 b/d of liquids and 35 MMcfd of gas.

Petroleum Geo-Services ASA
(PGS), Houston, agreed to acquire the floating production, storage, and offloading (FPSO) business of Norway's Awilco ASA. Awilco will effect a tax-free demerger of its FPSO business, which will be merged with PGS in a tax-free stock swap. Based on assumed liabilities and outstanding shares, the transaction is valued at about $860 million.

Apache Corp.,
Houston, acquired for $425 million (Australian) Mobil Exploration & Producing Australia Pty. Ltd.'s interests in two oil and gas fields off Western Australia. The acquisition includes a 25% interest in Harriet oil and gas complex on and around Varanus Island and a 35% interest in the East Spar gas/condensate field.

Reserve Royalty Corp.,
Calgary, is acquiring Jordan Petroleum Ltd., Calgary, for $300 million (Canadian). Including Jordan's debt, the deal will be worth $435 million. Reserve Royalty, an investment firm, is selling part of Jordan's assets to Cypress Energy Inc. for $73.9 million.

J.P. Morgan
plans to sell oil and gas properties in the two U.S. petroleum funds managed through its asset management services group. The funds own royalties and net profits in 22 properties, primarily in Texas, Oklahoma, and Wyoming. Total proved reserves of the properties are 3.8 million bbl of oil and 125.5 bcf of natural gas.

Coral Energy Canada Inc.,
an affiliate of Coral Energy LP, Houston, agreed to acquire Cibola Canada Energy Marketing Co., Calgary. Cibola Canada markets about 250 MMcfd of gas from a pool of about 50 Canadian producers. The acquisition will bring Coral Energy LP's gas marketing volumes to more than 7 bcfd.

BG plc
will separate its gas storage business from its Transco gas transmission business for U.K. customers. New business unit BG Storage carries out all BG's peak and seasonal gas storage operations. The unit is based in Solihull, U.K., and operates seven sites: liquefied natural gas storage facilities near Bristol, Strathclyde, Rochester, Manchester, and Mid-Glamorgan; a salt cavities site at Hornsea; and offshore Rough gas field.

Research

U.S. Department of Energy opened a petroleum technology field office in Tulsa to oversee federally sponsored exploration and production, environmental protection, and refining technology projects. Previously located in Bartlesville, Okla., the office was moved to Tulsa as part of DOE cutbacks.

LNG

Amoco Power Resources and three Spanish energy groups-Ente Vasco de la Energia, Repsol/Gas Natural, and Iberdrola Investimentos Soc. Unipessoal Ltda.-will conduct a detailed feasibility study of a liquefied natural gas regasification terminal and integrated power project at Bilbao, northern Spain. The study is scheduled for completion by early 1998.

Drilling-production

Azerbaijan International Operating Co. told Azerbaijani President Heydar Aliyev that first oil from Azeri, Guneshli, and Chirag fields-the major foreign-operated development in the Caspian Sea-will be produced Nov. 7 (OGJ, Aug. 25, 1997, p. 42).

Statoil AS
signed a 3-year lease with Transocean Offshore Inc., Houston, for the fourth-generation semisubmersible Transocean Arctic. Statoil will use the rig for exploratory drilling in the Norwegian North Sea and Barents Sea starting in February 1999. The contract is expected to be worth about $208 million to Transocean. It includes a cost-escalation provision that allows for recovery of certain incremental operating costs.

ARCO Alaska Inc.
let contract to VECO Construction Inc. for construction and installation of the Prudhoe Bay Miscible Injectant Expansion (MIX) project. The $160 million MIX project will increase production of miscible injectant at Prudhoe Bay by 20%. The miscible injectant will be used in the Prudhoe Bay enhanced oil recovery project, which is expected to increase liquids production by 20,000 b/d in late 1999 and boost ultimate liquids recovery by 50 million bbl. VECO will modify the Prudhoe central gas facility and install a 2,300-ton compressor module beginning in 1998.

Russian joint venture
Geoilbent Ltd. plans to drill about 300 development wells in North Gubkinskoye field in western Siberia as part of a $329 million, 5-year capital spending program. This six-rig drilling program has the potential to increase production from the current 7,000 b/d to as much as 75,000 b/d by 2002. Geoilbent, formed to develop North Gubkinskoye, is a joint venture of: Benton Oil & Gas Co., Carpinteria, Calif., 34%; and two Russian companies, Purneftegas and Purneftegasgeologia, 33% each.

Russia's
Sidanko Oil Co. is negotiating with several international oil firms to help it develop Kovykta gas field near Irkutsk. Field reserves are pegged at 870 billion cu m of gas. Sidanko owns 38% of Kovykta; South Korea's Hanbo group, Irkutsk oblast administration, and Irkutskenergo utility own the rest.

Conoco (U.K.) Ltd.
sold its interests in U.K. North Sea licenses to Beryl field partners Mobil North Sea Ltd. 50%, Enterprise Oil plc 22.778%, Amerada Hess Ltd. 22.222%, and OMV (U.K.) Ltd. 5%. The assets are believed to have been sold for $200 million and include Buckland, Sorby, and Maclure finds, with estimated combined reserves of 200-300 million boe. Buckland and Sorby are to be developed as subsea satellites of Block 9/13 Beryl A platform, while Maclure is to be developed as a subsea satellite of nearby Gryphon or Harding fields.

Shell Expro
brought on stream Kingfisher oil and gas field in the U.K. North Sea 4 weeks ahead of schedule. Shell aims for peak production of 37,000 b/d of condensate and 160 MMcfd of wet gas by yearend. Kingfisher, a satellite of the existing Brae B platform, will deliver condensate into the Forties blend pipeline stream.

Chevron Nigeria Ltd.
let contract to Global Industries Ltd., Houston, to transport and install two tripod platforms and lay about 29 miles of 4-14 in. pipe in Ewan field off Nigeria. The platforms are being fabricated in Nigeria. Global Industries will lay pipe from its Cheyenne pipelay/derrick barge in 15-40 ft of water during December 1997-March 1998.

Chevron Niugini Pty. Ltd.
estimates oil reserves in unitized Moran field in the southern highlands of Papua New Guinea at 130 million bbl. This puts the find in the same league as nearby Gobe field, in which the company also has an interest. Although extended production tests are still under way, Chevron expects to accelerate development to meet a mid-2000 start-up target.

Gas processing

Santos Ltd. and partners started up the upgraded Ballera gas plant in southwestern Queensland. The plant is now the hub of gas operations in the region, with pipelines extending to Brisbane, Moomba, and Adelaide. A new gas pipeline is being laid north to Mount Isa.

Gas marketing

Colonial Gas Co. and MidCon Gas Services Corp. entered a 1-year agreement to manage Colonial's portfolio of gas supplies, interstate pipeline transportation, and off-system storage resources. The objective is to lower costs for full-service gas customers. MidCon will act as Colonial's exclusive agent for scheduling day-to-day gas supply and storage refill requirements.

Copyright 1997 Oil & Gas Journal. All Rights Reserved.