INDUSTRY BRIEFS

Oct. 5, 1998
Exxon Corp. and Petroleos Mexicanos signed a crude oil supply agreement, under which Pemex will supply Exxon's 427,000 b/d Baytown, Tex., refinery with 65,000 b/d of heavy Maya crude. Exxon will build a coker and related facilities to enable the refinery to process the crude. Completion of the Exxon funded project is slated for second half 2001. Ssangyong Group,

Refining

Exxon Corp. and Petroleos Mexicanos signed a crude oil supply agreement, under which Pemex will supply Exxon's 427,000 b/d Baytown, Tex., refinery with 65,000 b/d of heavy Maya crude. Exxon will build a coker and related facilities to enable the refinery to process the crude. Completion of the Exxon funded project is slated for second half 2001.

Ssangyong Group,
Seoul, plans to sell its 28% stake in Ssang- yong Oil Refining Co. (SORC) by December to help it stay afloat. Ssangyong is talking to several interested parties, but regional analysts believe it will have difficulty finding a buyer because of South Korea's and the region's economic downturn. SORC operates a 500,000 b/d refinery at Onsan and is owned 35% by Saudi Aramco, thought to be a potential buyer for Ssangyong's stake.

Lubes

Malaysian Refining Co. Sdn. Bhd., a joint venture of Petronas, Conoco Inc., and Statoil AS, let contract to Foster Wheeler Ltd., Reading, U.K., to build Malaysia's first lubricant base oil plant at Melaka. Foster Wheeler will produce a basic engineering design and prepare an engineering, procurement, and construction bid invitation. The plant is intended to be operational by 2002 with capacity to produce 7,500 b/d of hydroprocessed base oils. It will be integrated with Petronas's 100,000 b/d refinery at Melaka and with a second 100,000 b/d plant being commissioned there.

Sun Co.,
Philadelphia, at presstime was assessing damage caused by Hurricane Georges to its Yabucoa, P.R., lubricants plant. Sun said it will meet all its lubes supply commitments with stocks and with production from other plants. The Yabucoa plant produces 9,000 b/d of lube base stocks.

Drilling-production

Pemex let a $187 million contract to Bufete Industrial Construcciones SA de CV, Mexico City, for engineering, procurement, and construction of the AKAL-L production compression platform for the Cantarell oil field complex (OGJ, Sept. 7, 1998, p. 30). Kvaerner ASA unit Kvaerner Process, Houston, will perform engineering and procurement on all tagged items, under subcontract to Bufete. Kvaerner's contract is worth $18 million. Engineering, construction, and installation together are expected to take 21/2 years. Ranger Oil (U.K.) Ltd., Calgary, disclosed test results of appraisal well 29/2c-12Z in Kyle field in the central U.K. North Sea. The well flowed at a maximum rate of 9,750 b/d of oil, limited by a restricted choke and processing facilities on the drilling rig. Ranger plans to seek approval to develop Kyle as a subsea tie-back to a production, storage, and offloading ship in Banff field, 12 km north of Kyle. Early development is likely to be through one well brought on stream in spring 1999, with a second production well to be completed the same year.

Canadian Occidental Petroleum Ltd.,
Calgary, disclosed first oil from Ejulebe field off Nigeria. The EJ-3 development well is flowing into production facilities connected to the Ukpokiti storage and tanker loading terminal. Four high-capacity production wells and one water-injector were drilled. All production facilities have been commissioned, and testing will continue over the next several weeks, before achieving commercial production of 10,000 b/d in October.

Phillips Petroleum Co. U.K. Ltd.
produced first gas from Delilah field off the U.K. Block 48/30 Delilah was developed as a single well tie-back to the Della subsea manifold, which in turn is tied back to the Hewett platform 7 miles away on Block 48/29a. Phillips said first production was at a rate of 19 MMcfd but that Delilah is capable of delivering more than 23 MMcfd.

Norway's Statoil AS
is studying how and when to remove its 2/4-S gas riser platform in Ekofisk gas field. Statoil has rerouted the Statpipe gas trunk line around the old Ekofisk field center, which was closed down by operator Phillips Petroleum Co. Norway under its Ekofisk redevelopment program (OGJ, Sept. 7, 1998, p. 32). The platform served as a pig trap and metering point for gas being exported to Emden, Germany. Statoil said abandoning 2/4-S will trim 30 million kroner/year ($4 million/year) from Statpipe operating costs.

Pipelines

Williams Cos. is holding an open season through Oct. 16 on a planned expansion of the Kern River gas pipeline into the Long Beach, Calif., area. Williams identified several possible routes for the 24-in., 300 MMcfd lateral and conducted preliminary feasibility studies on each. An in-service date of November 2001 is projected. The open season follows Williams's purchase of Southern California Gas Co.'s Kern River option, which the California Public Utilities Commission required SoCalGas to divest for competitive reasons. Williams will charge an incremental rate for transportation in the proposed lateral.

Transfield Energy Pty. Ltd.,
Sydney, and Tri-Star Petroleum Co., Midland, Tex., are planning a $750 million (Australian) project including a 700-km Queensland pipeline to link coal bed methane (CBM) fields near Roma to a $70 million, 160-MW power plant under construction near Townsville. Transfield owns the power plant-which will use 65 MMcfd of gas-and will own and operate the 130 MMcfd pipeline. Tri-Star is permit holder for the CBM fields. The power plant will eventually be expanded to 500 MW. The pipeline will compete with Chevron Asiatic Group's planned Papua New Guinea-to-Queensland line.

Power

Boral Ltd., Sydney, operator of the Katnook fields joint venture in southeastern South Australia, has entered into a heads of agreement to supply as much as 22.8 bcf of natural gas through 2011 to a 40-MW power station proposed for the region. Subsidiary Boral Energy Power will build the facility on the condition that the Katnook JV can firm up at least 8 bcf of gas reserves in Ladbroke Grove field near Katnook.

Catalysts

Nova Chemicals Ltd., Calgary, developed a new catalyst for polyethylene production that it says will produce improved products such as film, packaging, and plastic bags. The company calls the family of single-site catalysts "a breakthrough." Nova will license the catalyst worldwide, once patents are approved. It can be used in existing polyethylene plants and has been tested for the past year at a pilot plant in Sarnia, Ont.

Petrochemicals

Saudi European Petrochemical Co. (Ibn Zahr), a subsidiary of Saudi Basic Industries Corp., is planning to build a third polypropylene plant at Al-Jubail. The plant, scheduled to start up in 2003, will produce 320,000 metric tons/year of polypropylene, increasing the company's output to 900,000 tons/year. Parsons Corp., Pasadena, Calif., was awarded a contract to build Ibn Zahr's second polypropylene plant, which will also produce 320,000 tons/year. Under terms of this contract, Parsons will also boost the first plant's capacity to 320,000 tons/year from 200,000 tons/year.

ARCO Products Co.
let contract to Jacobs Engineering Group Inc., Houston, to provide reaction/polymerization modules for a world-scale poly- propylene plant ARCO is building at Carson, Calif. Jacobs is also providing engineering, procurement, and construction liaison services for the plant. ARCO said the project is the most extensive use of offsite assembled modules in a Unipol polypropylene plant to date. Start-up is slated for third quarter 1999. Unipol is a polyolefin technology licensed by Union Carbide Corp., Danbury, Conn.

Companies

ARCO British Ltd. and Mobil North Sea Ltd. agreed to combine their southern North Sea gas exploration and production operations under a single company. The joint venture will operate 15 producing gas fields and is intended to save £5 million/year ($8 million/year), equivalent to 10% of the companies' combined annual outlays. The new company will be equally owned by the firms and staffed by people from both companies. It is expected to take over operations on Sept. 1, 1999, from offices in East Anglia, U.K. Interests held by ARCO and Mobil in individual assets and licenses will remain unchanged.

A group of four firms
acquired Lasmo Italia Sud SpA's 23.25% interest in southern Italy's Tempa Rossa oil field for $33.6 million (see map, OGJ, Nov. 4, 1996, p. 38). The firms are ENI SpA, Enterprise Italiana SpA, Fina Italiana SpA, and Mobil Italiana SpA. The deal includes the Gorgoglione and Tempa D'Emma concessions and nearby exploration acreage. The four companies will ultimately hold similar equity in a joint development project. The deal allows the partners to develop the field based on fixed equities for field life and agreed arrangements for operatorship, with ENI operating until first oil and Fina thereafter.

Hartland Pipeline Services Ltd.,
Calgary, completed the $110 million (Canadian) purchase of construction firm BFC Pipelines, Edmonton. Hartland's services include: fabrication, installation, and construction of gathering systems and oil and gas pipelines; environmental reclamation services; and horizontal drilling.

Texaco Inc.
bought a 65% stake in North Buzachi oil field in western Kazakhstan from Saudi Arabia's Nimir Petroleum Co. The field, about 195 km north of the Caspian Sea port of Aktau, has estimated oil reserves of 80 million metric tons. Texaco will operate the field and conduct commerciality studies. "Significant production" is expected to start in 2-4 years, Texaco said.

Fracmaster Ltd.,
Calgary, hired financial consultants to seek a buyer for former CEO Alfred Balm's 43% interest in the company. Balm put his interest up for sale after a majority of investors failed to make a second payment for shares they agreed to acquire last fall for $19.50 (Canadian)/share, payable in two installments. Most defaulted on the second payment after share values fell about 80% in the past year. Balm said he was unwilling to accept less than $9.75/ share for the second payment and would take legal action against individuals and companies that defaulted on it.

Sunoma Energy Corp.
acquired more than 90% of the common stock of Barrington Petroleum Ltd. and intends to acquire the remainder of Barrington common shares for $3.75/share. Barrington fought Sunoma's unsolicited take- over attempt at first but relinquished its battle last month (OGJ, Sept. 14, 1998, Newsletter).

Halliburton Co.
and Dresser Industries Inc. completed their merger (OGJ, Mar. 2, 1998, Newsletter). The combined firm expects to take a one-time pretax charge of $900 million in the third quarter to provide for consolidation, restructuring, and merger-related expenses.

Exploration

China National Offshore Oil Corp. disclosed another oil discovery in the Pearl River Mouth basin. Panyu 4-2 field is 160 km southeast of Hong Kong on Block 15/34 in the South China Sea. Panyu 4-2 is thought to have a 169.2-m thick oil layer, but the structure also holds gas. Reserves are postulated at 20 million metric tons. Several oil and gas-bearing structures have been found on the block, which is operated by Santa Fe Energy Resources Inc., Houston.

Units of Burlington Resources Inc.
(BR) and Talisman Energy Inc. made another discovery on Menzel Lejmat Block 405 in Algeria's Berkine basin (OGJ, Dec. 22, 1997, p. 30). On test of Devonian Strunian F1 sandstone, MLW-1 flowed 1,545 b/d of 42° gravity oil and 3.34 MMcfd of gas through a 40/64-in. choke with flowing wellhead pressure of 885 psig. It was drilled to 3,670 m TD and cut a net 5.5 m of pay in two intervals. A 2-m interval in Triassic TAG flowed oil at a low rate but failed to produce fluids to the surface. Operator BR owns a 65% working interest in a production-sharing agreement with Sonatrach; Talisman owns 35%.

Tankers

Dubai Shipping Co., a unit of Emirates National Oil Co. (ENOC), signed a $50 million loan with three banks to finance the purchase of two new oil tankers from South Korea's Daewoo Corp. Daewoo's contract is for $64.6 million. The tankers will be delivered to Dubai Shipping in first half 2000. Each 85,000 cu m vessel will be 228 m long and have a design draft of 12.3 m. ENOC said the vessels would handle feedstock imports for a new $250 million condensate refinery at Jebel A* and refined products exports.

Maritrans Inc.,
Philadelphia, converted the first of its fleet of single-hull tanker barges to a double-hull vessel. The 10,549 dwt Maritrans 192 now meets the requirements of the U.S. Oil Pollution Act of 1990 (OPA). Maritrans, an independent builder and operator of petroleum transport vessels, performed the conversion at a Tampa facility. It plans to rebuild its fleet of superbarges to meet OPA standards, thus enabling them to operate well into the next century. It says the conversion cost is much less than that of a newbuild.

Gas storage

Petal Gas Storage Co, Shreveport, La., is holding an open season for firm storage service for its proposed salt cavern storage expansion project (OGJ, July 13, 1998, p. 38). The open season ends Oct. 30.

Alternate energy

Enron Wind Corp. completed construction of the 107-MW Lake Benton I wind power generation plant near Lake Benton, Minn. The firm says it is the world's largest wind power generation facility. The plant-built, owned, and operated by Enron Wind-will deliver power for about 3¢/kw-hr to Northern States Power Co. under a 30-year purchase agreement. It uses 143 Zond Z-750-kw wind turbines, made by Zond Energy Systems Inc., the manufacturing arm of Enron Wind. The project is the second phase of a 400-MW renewables program that will provide 425-MW of new wind power capacity by yearend 2002. The 102-MW NSP Phase III project, also near Lake Benton, is under construction.

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