INDUSTRY BRIEFS

Correction

An industry brief about a helium supply agreement between BOC Gases and Union Pacific Fuels Inc. (UPFI) incorrectly stated that BOC has access to helium from six other UPFI plants (OGJ, Aug. 17, 1998, p. 46). The six other helium plants from which BOC receives helium are not owned by UPFI.

Refining

Sun Co. Inc. unit Sunoco Chemicals completed expansion of the cumene unit at Sun's Philadelphia refinery. The project increased cumene capacity to 850 million lb/year from 500 million lb/year. It involved installation of a new zeolite catalyst system, licensed jointly by Mobil Technology Co. and Raytheon Engineers & Constructors. The system was installed in 48 days; the expanded unit is now operating. Nearly all output will be used to feed Sun's recently acquired 1 billion lb/year phenol plant, also at Philadelphia.

Saudi Aramco Shell Refinery Co.
let contract to Foster Wheeler Italiana SpA to provide engineering and procurement for a thermal gas oil unit to be built at its 310,000 b/d Jubail refinery. The unit will consist of a visbreaker/thermal cracker integrated with a gas turbine cogeneration system. Capacities were not disclosed. The units are slated for completion late in 1999.

Spills

U.S. Minerals Management Service plans workshops Sept. 1 in Houston, Sept. 15 in New Orleans, and Sept. 24 in Camarillo, Calif., to explain its oil spill financial responsibility rule to offshore operators.

Pipelines

Shell Philippines Exploration BV let contract to Allseas Marine Contractors SA, Chatel-St. Denis, Switzerland, for installation of pipelines for the Malampaya deepwater gas development off the Philippines. Work will include laying a 24-in., 506-km pipeline from an offshore platform to a site at Batangas on Luzon Island; water depths range up to 650 m. Two 16-in., 30-km pipelines will be installed between the subsea manifolds, in 850 m of water, and the platform. And a 24-in. condensate export line will connect the platform to a nearby catenary anchor-leg mooring buoy. Allseas' Solitaire pipelay ship will begin work in 2000 (OGJ, June 30, 1997, p. 37).

MMS
issued a rule delineating responsibility for offshore pipelines between it and the Department of Transportation's Office of Pipeline Safety. MMS will oversee producer-operated facilities and pipelines, and OPS will regulate main lines and associated pumping and compressor facilities. OPS previously regulated many producer-operated lines.

Duke Energy International LLC,
Charlotte, N.C., acquired the Queensland state gas transmission pipeline from PG&E Corp., San Francisco, for $200 million (Australian). Duke is relocating its Asia-Pacific headquarters from Hong Kong to Melbourne as part of a strategy to become a major player in Australia's gas and electricity markets. Its plans for Australia include gas and electricity trading operations and developing electric power generation capacity. It has been selected by Tasmania to mastermind ways of bringing natural gas from the offshore Bass basin to Tasmanian markets (see story on p. 30 and OGJ, May 25, 1998, p. 28).

Altura Energy Ltd.,
Houston, signed a letter of intent with a unit of Koch Industries Inc., Wichita, to form an alliance to convert an 82-mile hydrocarbon gas pipeline in Southwest Texas back to CO2 service. The pipeline would transport the CO2 to the southern Permian basin for use in enhanced oil recovery projects. Altura would commit 17 MMcfd of CO2 produced and gathered at the Terrell gas plant. Altura will coordinate efforts to expand the alliance to other producers. To date, letters of intent have been signed to transport about 65 MMcfd of CO2 in the pipeline, owned by Koch Midstream Services Co.

A combination of
external corrosion and stress corrosion cracking were the likely causes of an Aug. 8 natural gas pipeline explosion in northern Alberta, says Nova Gas Corp., Calgary. The rupture occurred in the 36-in. main line about 186 miles northwest of Edmonton. The line was returned to service Aug. 11. As a precaution, pressure was reduced by 10% on the section that failed. The company said all delivery commitments were met. Nova is continuing an investigation into the break to ensure the integrity of the line.

Epic Energy
revived a proposed $874 million (Australian) expansion of its Dampier-to-Bunbury gas pipeline in Western Australia by announcing it will increase capacity to allow it to meet new contracts. Epic will add 84 MMcfd of capacity in the first expansion stage, in addition to 158 MMcfd previously agreed under a contract with a steel project near Geraldton. The new contracts are expected to underpin a 10-year expansion program, the aim of which is to loop the system. The pipeline transports gas from North West Shelf fields to southwestern Western Australia. Epic bought it in March for $2.4 billion.

Gas processing

Koch Midstream Gathering & Processing Co., Wichita, signed a letter of intent with Duke Energy Field Services to exchange certain natural gas gathering and processing systems. Duke will acquire Koch's gathering and processing systems in South Texas and Oklahoma, which Koch purchased as part of its Delhi Gas Pipeline Corp. acquisition last November. Koch will acquire Duke's Black Warrior system in Alabama, AIM Pipeline in Mississippi, and certain assets in West Texas and New Mexico.

Gas storage

Mississippi Oil and Gas Board approved conversion of Four Mile Creek gas field in Monroe County, Miss., to a natural gas storage field. The field is northeast of Amory, Miss., between Texas Eastern Mainline M-1 and Tennessee Gas Pipeline 500 Leg, and just north of a Mississippi Valley gas distribution system. The storage site will have total working gas volume of 8 bcf and deliverability of more than 200 MMcfd.

Drilling-production

Barrett Resources Corp.'s Cave Gulch 1-29 LAK well, 45 miles northwest of Casper, Wyo., blew out Aug. 13. At presstime, Barrett had ignited the uncontrolled gas flow. No one was injured by the blowout, which appeared to have been caused by a downhole failure of the well casing, said Barrett. The well had been producing 45 MMcfd, and wellhead pressure had fallen to 8,800 psi from 10,900 psi. Barrett has temporarily halted preparations for testing Cave Gulch 3-29 MAD, and is drilling ahead on two offset wells within 1 mile of 1-29 LAK, although under careful watch.

BP Exploration Operating Co. Ltd.
and Algerian state firm Sonatrach let contract to a combine of JGC Corp., Yokohama, and M. W. Kellogg Co., Houston, for front-end engineering design of the In Salah gas development in Algeria. BP-Sonatrach started a $3.5 billion program to develop gas finds in the In Salah region, 1,200 km south of Algiers (OGJ, Dec. 25, 1995, p. 26). The design will include well sites, a gas gathering system, gas processing plant, and 48-in., 500-km export pipeline and metering systems. BP and Sonatrach expect to complete a nine-well drilling program early next year and make a development decision in third quarter 1999.

China National Offshore Oil Corp.
(Cnooc) let contract to Alliance Engineering Inc., Houston, for basic design of the Dong Fang 1-1 gas field development project. Facilities will include a central production platform with separation and dehydration units, two unmanned wellhead platforms (two more are planned), a 113-km export pipeline, an onshore terminal, and interfield pipelines. Alliance will evaluate options for the minimum wellhead facilities. The eight-leg central platform will have 16 skirt piles, six producing wells, and two spare well slots. Dong Fang, 113 km southwest of Hainan Island in the South China Sea, will be Cnooc's first offshore development without the help of a western operator.

British-Borneo Petroleum Syndicate plc,
London, installed a Seastar monohull tension-leg platform in Morpeth field in the Gulf of Mexico. The TLP was designed and built by Atlantia Corp., Houston, and installed in 1,700 ft of water by J. Ray McDermott Inc., New Orleans. The project is claimed to be the first deployment of this technology (OGJ, Jan. 20, 1997, p. 42). Hook-up and commissioning are under way. First oil is due in September. British-Borneo is also developing Allegheny field in the gulf with a Seastar TLP; first oil is due in third quarter 1999.

Phillips Norway Group's
Ekofisk II redevelopment project in the Norwegian North Sea began producing oil and gas (see story, p. 29, and OGJ, May 18, 1998, p. 46). The project was on schedule and 20% under budget, said Phillips. Production is expected to reach 306,000 b/d of oil and 789 MMcfd of gas, 20% above initial expectations. Phillips Norway Group consists of: Phillips Petroleum Co. Norway 36.96%, Fina Exploration Norway SCA 30%, Norsk Agip AS 13.04%, Elf Petroleum Norge AS 8.45%, Norsk Hydro Produksjon AS 6.7%, Total Norge AS 3.5%, Statoil 1%, and Saga Petroleum ASA 0.3%.

A group of four companies
will begin a four-well program in the Jeanne d'Arc basin off Newfoundland in October. Chevron Canada Resources Ltd., Mobil Oil Canada Ltd., Petro-Canada, and Norsk Hydro Canada Oil & Gas Inc. said two of the wells will be drilled in Hebron and Whiterose fields. The locations for the others have not been determined. The exploration program is in the same area as Hibernia and Terra Nova oil fields, in which the four companies are also partners. Glomar International (Canada) Drilling Co. will provide a semisubmersible drilling rig for the program.

Companies

Sunoma Energy Corp., Calgary, launched a $385 million (Canadian) takeover bid for Barrington Petroleum Ltd., also of Calgary. The offer is for $222.3 million cash and assumption of $163 million in Barrington debt. Sunoma, a private company, is backed by Fort Worth investor group Natural Gas Partners. Barrington is reviewing the unsolicited bid and is setting up a shareholder rights protection plan. Barrington's first quarter production averaged 17,600 b/d. Sunoma acquired Orbit Oil & Gas Ltd., Calgary, in January for $105 million.

R&B Falcon Corp.
signed a letter of intent to acquire Cliffs Drilling Co. Both companies are based in Houston. If the deal proceeds, R&B Falcon will issue 1.7 shares of common stock for each outstanding share of Cliffs Drilling. The deal, valued at $565-605 million, will be accounted for as a purchase. Oil service analyst Simmons & Co. International said, "Theellipsedeal further consolidates the shallow-water Gulf of Mexico jack up drilling market." Simmons expects a definitive merger agreement between the firms shortly.

ARCO
closed its purchase of Union Texas Petroleum Holdings Inc., Houston (OGJ, May 11, 1998, p. 36). ARCO will close Union Texas's Houston office by yearend. Only about six Houston employees will get job offers from ARCO, reports say. About 250 employees will be terminated by Oct. 31, leaving only a handful until the office is officially closed.

Total will acquire
Petrofina SA's 36% stake in Total Fina Gabon, boosting Total's interest in the firm to more than 90%. Total Fina Gabon operates 19 service stations in Gabon, markets nearly 90,000 metric tons/year of refined products, and serves 20% of the local market. Total also agreed to buy Petrofina's refining and distribution assets in Gabon, thus increasing its stake in refinery operator Sté. Gabonaise de Raffinage to 22% and its interest in products storage firm Sté. Gabonaise d'Entreposage de Produits Pétroliers to 18.7%.

Petrochemicals

An explosion at Chinese Petroleum Corp.'s third naphtha cracker at Linyuan, Taiwan, killed one worker and seriously injured a second. The blast occurred when the two contract workers were performing regularly scheduled maintenance on a holding tank. A preliminary investigation indicated the explosion may have been caused by sparks from a welding torch. This was the 18th serious accident at CPC facilities since July 1996. Nearly all of them have been determined to have resulted from lax enforcement of safety procedures.

Uzbekneftegas
let contract to a group led by ABB Lummus Global, Bloomfield, N.J., for construction of the Shurtan gas chemical complex at Tashkent. The group includes Italy's ABB Soimi and a joint venture of Japanese firms Nissho Iwai Co., Mitsui & Co., and Toyo Engineering Co. The project will include gas treatment and separation units, a 140,000 metric ton/year ethylene plant, a butene-1 copolymer plant, and a 125,000 ton/year linear low-density polyethylene plant. It will use Lummus's SRT VI cracking heater and Nova Chemicals Ltd.'s Sclairtech polyethylene technology. Start-up is slated for yearend 2000.

Catalysts

Phillips Petroleum Co. began commercial production of metallocene compounds at a new plant at Bartlesville, Okla. The compounds are used to manufacture metallocene catalysts for polyethylene production. Metallocene catalysts can provide control of the molecular structure and properties of a variety of polyethylene types, including high, medium, and linear low-density. Phillips markets metallocene-based polyethylenes under the mPACT brand.

Exploration

Continental Energy Marketing Ltd., Calgary, acquired two exploration properties in Indonesia. Both were made through the purchase of 100% of the outstanding shares of the companies that owned the properties. The sole asset of Apex (Bengara-II), a British Virgin Islands firm, was a 30-year production-sharing contract (PSC) with Pertamina for the 1.2 million acre Bengara-II contract area, mostly onshore in the Tarakan basin in East Kalimantan. The second firm, sister company Apex (Yapen), is in the final stages of negotiation for a 30-year PSC for the 2.5 million-acre Yapen contract area off northern Irian Jaya.