INDUSTRY BRIEFS

Gas processing

Novagas Corp., Calgary, won approval by British Columbia for a $97 million (Canadian) natural gas processing plant at Stoddart, near Fort St. John, B.C. Construction on the gas plant and related pipelines begins immediately. Gas and liquids will be shipped to the Younger gas plant at Taylor, B.C., and to Novagas's Redwater, Alta., NGL fractionation plant.

Refining

Tesoro Petroleum Corp., San Antonio, will acquire Shell Anacortes Refining Co.'s 108,000 b/d refinery at Anacortes, Wash., for $297 million. Shell Anacortes is a unit of Shell Oil Co. Combined with Tesoro's recent agreement to purchase BHP Petroleum Pty. Ltd.'s Hawaii refinery and related operating assets (OGJ, Mar. 30, 1998, p. 29), Tesoro will own and operate three U.S. West Coast refineries with a combined capacity of 280,000 b/d. The transaction is expected to close this summer.

Reliance Petroleum Ltd.,
New Delhi, secured financing for a planned expansion of its Jamnagar, India, refinery to 360,000 b/d from 300,000 b/d. Expansion work should begin in second half 1999. Total project costs increased 16% to 112.3 billion rupees from an original estimate of 96.86 billion rupees, according to the Industrial Development Bank of India.

Indian Oil Corp.
(IOC) plans to commission its new Panipat refinery in Haryana, India, later this month. The 120,000 b/d refinery was scheduled for commissioning in July 1997 but was delayed due to equipment and components shortages.

NGL

Transportadora de Gas del Sur SA (TGS), Buenos Aires, signed a 3-year contract with Brazilian state firm Petroleo Brasileiro SA to export 80,000 metric tons/year of NGL to Brazil. TGS operates a 776 MMcfd gas processing plant at Bah!a Blanca, Argentina. Plant inlet capacity is being increased to 1.41 bcfd (OGJ, Oct. 6, 1997, p. 74).

Exports-imports

U.S. Trade and Development Agency will pay $750,000 for a feasibility study on pipeline routes to move Turkmenistan gas across the Caspian Sea to western markets as an alternative to shipments through Iran.

Drilling-production

Petroleos de Venezuela SA will tender to local and international companies the $575 million Pigap II gas-lift project in eastern Venezuela's Punta de Malta district. The project is designed for secondary recovery from 20 injection wells using an estimated 1.2 bcfd of gas at pressures above 8,000 psi. The winning consortium will build, own, and operate the plant for 20 years. Construction is planned to begin by yearend.

Petroecuador,
Ecuador's state-run oil firm, is inviting bids to operate 10 oil fields in the Oriente region. Petroecuador wants to boost the fields' production, currently averaging 10,000 b/d. The fields are: Bermejo, Chanangue, Charapa, Pena Blanca, Pacay, Palanda-Yuca Sur, Pindo, Puma, Singue, and Tiguino. Deadline for bid submissions is May 29.

Saga Petroleum AS,
Oslo, began a 6-month production test of H-Central formations with a well drilled by the Scarabeo 5 semisubmersible rig on North Sea Block 34/7 off Norway. The 34/7-26A well was tied back to Gullfaks C platform via a subsea template in nearby Tordis East field. The 26A well is expected to add 15,000 b/d of oil production to the 70,000 b/d currently flowing from Tordis East. Saga said a decision on development of H-Central will follow completion of the long term test.

Anadarko Algeria Corp.
began oil production on May 4 from Hassi Berkine South field on Block 404 of Algeria's Berkine basin. License partner Lasmo Oil (Algeria) Ltd. said flow through the central production facility could reach 60,000 b/d over 60 days as development wells are brought on stream. Output from the field is anticipated to reach 300,000 b/d in the next 3 years. License partners are operator Anadarko 24.5%, state firm Sonatrach 51%, Lasmo 12.25%, and Maersk Olie Algeriet AS 12.25 %.

Noble Drilling Corp.
let contract to Friede Goldman International Inc., Jackson, Miss., to convert the Fri Rod* submersible rig into an EVA-4000 semisubmersible capable of deepwater drilling. The conversion will be at Ham Marine Inc.'s shipyard at Pascagoula, Miss. Friede Goldman Newfoundland will fabricate the major structural components, including pontoons and columns. The rig is expected to arrive at the shipyard in January 1999, after completing its current contract. The project's targeted completion date is first quarter 2000.

Norway's
Statoil AS let a $23 million contract to a joint venture of Rockwater Ltd., Aberdeen, and Saipem SpA, Milan, for marine installation during development of Åsgard fields in the Norwegian Sea. The venture will install mooring systems for Åsgard's production semisubmersible, storage tanker, and loading buoy in spring 1999. Tow-out and hook-up to the pre-installed mooring system will take place in 2000 (OGJ, Aug. 19, 1996, p. 50).

Monument Oil & Gas plc,
London, disclosed test results from an appraisal well on Block 21/28a Fyne discovery in the U.K. North Sea. Monument said the 21/28a-8 well encountered 36 ft of oil and gas pay and flowed from a selected 15 ft interval at a rate of 1,080 b/d of 21.4° gravity oil through a 32/64-in. choke. Monument is planning an appraisal well on the Pilot oil find on neighboring Block 21/27a, where it has a 32.5% interest. The well is scheduled for second half 1998. Monument is operator and 75% interest holder in Fyne, with partner Halliburton Energy Development holding 25%.

Union Texas Petroleum Holdings Inc.,
Houston, let contract to Willbros Group Inc., Tulsa, for engineering services for the Boquer?n oil field development project in eastern Venezuela. Willbros will perform basic engineering for new and existing facilities at Boquer?n. Construction and installation of the new facilities will be completed by mid-1999.

Pipelines

Maritimes & Northeast Pipeline Partners (M&NP) let a $300 million (Canadian) natural gas pipeline construction contract to an alliance of BFC Pipelines, Scarborough, Ont., a unit of BFC Construction Group Inc.; and Marine Pipeline Construction of Canada, a division of Murphy Pipeline Inc., East Moline, Ill. The alliance is to lay M&NP's 563 km pipeline from Goldboro, N.S., to St. Stephen, N.B. (OGJ, Jan. 12, 1998, p. 30). Construction is set to begin in November 1998; first gas is scheduled to flow 12 months later.

TransCanada PipeLines Ltd.,
Calgary, filed a $984 million (Canadian) expansion application for 1999 with Canada's National Energy Board (NEB). The program would add about 275 MMcfd of firm transportation capacity to Eastern Canada and U.S. Midwest and Northeast customers by Nov. 1, 1999. If approved, the expansion would add 171 MMcfd of capacity to Eastern Canada, 26.5 MMcfd to the Midwest, and 77.5 MMcfd to the Northeast. TransCanada wants to add 348 miles of pipeline looping and four compressor units.

NEB
ruled it has no jurisdiction regarding the Treaty 8 Tribal Association's outstanding land claims over the Alliance Pipeline project. The association argued that the British Columbia and federal governments should have consulted it over the $3.7 billion (Canadian) Alliance natural gas and liquids line from British Columbia to Chicago (OGJ, Mar. 16, 1998, p. 42). Alliance said the NEB hearing will now move to its conclusion and Alliance will work with the association to resolve disputes. A spokesman for the native groups said the NEB ruling is an endorsement of treaty rights and the obligation of governments to consult the tribal association.

Companies

Union Pacific Resources Group Inc., Fort Worth, will make available via the Internet additional details on the estimated $600 million in producing properties the company will sell as part of its previously announced restructuring program. The sale is organized into nine bid packages and will be conducted in two phases. The first phase will include properties in the Gulf of Mexico, South Louisiana, South Texas, and East Texas. The second phase includes properties in the Rocky Mountains, Argentina, Egypt, and Australia. Canadian properties will be offered as several discrete property packages.

Belco Oil & Gas Corp.,
New York, will acquire an 80% interest in Big Bear Exploration Ltd., Calgary, for $200 million (Canadian). Belco's investment consist of $10.5 million of 5% convertible preferred shares of Big Bear for $0.85/share with each share convertible into one common share of Big Bear. Belco will also subscribe for up to $120 million of special acquisition warrants at a price of $0.72/warrant to fund oil and gas property acquisitions by Big Bear. Belco has an option to purchase an additional $10.5 million of convertible preferred shares. Big Bear currently produces about 2,400 boed of oil and gas.

Dailey International Inc.,
Conroe, Tex., acquired all of the outstanding shares of Integrated Drilling Services Ltd. (IDS), a private Scottish company, for 1,064,600 shares of Dailey common shares and $9.354 million in cash. Dailey also assumed or repaid IDS debts totaling $10 million. IDS designs and manufactures proprietary logging-while-drilling tools.

Exploration

Westech Energy New Zealand Ltd.'s and Enerco Ltd.'s Kauhauroa 1 appears to be the country's first commercial discovery outside the Taranaki basin. The well, 10 km north of Wairoa in the East Coast basin, stabilized at 11.5 MMcfd of dry gas from untreated Miocene Makaretu at 3,600-4,008 ft with 2,100 psi flowing tubing pressure after 60 hr. CAOF exceeds 70 MMcfd. Shallow zones remain to be tested.

Petroecuador
signed a production-sharing contract (PSC) with ARCO for exploration on Block 24 in Ecuador's Oriente region. The block was tendered to ARCO 4 years ago, but signature of the PSC was delayed until an agreement was reached regarding Block 10, which is now being developed. Initially, ARCO will invest about $6 million for seismic surveys.

U.S. Minerals Management Service
scheduled the next Western Gulf of Mexico lease sale for Aug. 26 in New Orleans. Sale 171 will offer 3,770 blocks totaling 20.6 million acres. They are 9-200 miles off Texas and Louisiana, and 2,322 blocks are in more than 200 m of water.

Pangaea (Peru) Energy Ltd.,
a unit of Pangaea Energy International Ltd., Calgary, will begin drilling a wildcat on Block 71 in the Ucaya* basin of east-central Peru later this year, upon completion of transfer of operating rights from Murphy Oil Corp., El Dorado, Ark. Pangaea acquired 565 km of 2D seismic and is reprocessing another 220 km of data on the block. Work on the 2.5 million acre block will be performed under a joint venture, with Pangaea holding 88% interest and Murphy Oil 12%.

FX Energy Inc.,
Salt Lake City, disclosed two agreements that formalize its joint effort with Apache Corp. and the Polish Oil & Gas Co. to identify hydrocarbon exploration and development opportunities in Poland. On Mar. 15, 1998, FX, Apache, and a department of the University of Mining and Metallurgy at Krakow entered into a study agreement to review and evaluate geological data covering the Polish Lowlands, which has produced 2.5 tcf of natural gas. The study area covers all of the productive and potentially productive areas within Poland other than the Carpathians and the Baltic Syneclise, where FX Energy already holds significant concession acreage positions (OGJ, Apr. 6, 1998, p. 44).

Oil & Natural Gas Corp. of India's
(ONGC) Videsh international unit will acquire a 10% stake in an Agip SpA group block in the Caspian Sea off Azerbaijan. ONGC Videsh is already working jointly with Azerbaijan's State Oil Co. of Azerbaijan Republic to explore for hydrocarbons in the South Caspian.

Petrochemicals

Mobil Chemical Co. plans to build a 65-million gal/year grassroots cyclohexane facility at its petrochemicals complex at Beaumont, Tex. The project will convert part of the plant's existing benzene and hydrogen supply to cyclohexane, an intermediate chemical used primarily to make nylon fibers and resins. Mobil claims the new complex, which is expected to come on stream in third quarter 1999, will result in Mobil Chemical becoming the world's third largest manufacturer of cyclohexane with production of 8,480 b/d. The company also makes about 4,240 b/d of cyclohexane at its Singapore plant.

Montell Polyolefins BV
granted its first license in China for use of its new-generation Spheripol polypropylene production process. The license was granted to Huabei Oilfield Refinery, a unit of China National Petroleum Corp. Huabei plans to build a 50,000 metric ton/year polypropylene plant at Ren Qui, 150 km south of Beijing. Montell has already granted nine licenses in China for its earlier Spheripol process to plants with combined capacity of 700,000 tons/year of polypropylene.

Hindustan Petroleum Corp. Ltd.
(HPCL) reported that its Visakhapatnam, India, refinery's propylene unit is on stream. The refinery's 60,000 b/d crude distillation unit was damaged in a fire that killed 60 people and caused facility damages of $25.5 million late in 1997 (OGJ, Oct. 6, 1997, p. 34). Work also continues on a $253 million program to double the refinery's crude distillation capacity.

LNG

BG plc wants to supply liquefied natural gas (LNG) to the proposed 495-MW electric generation project planned at Palghar, Maharashtra, India, by Indian firm BSES. Enron Corp. is also bidding to supply gas for the generating project to be commissioned late in 2000. BSES Chairman R.V. Shahi said BG's offer will be considered if the company can construct an LNG terminal and a pipeline system before the power project's completion.