INDUSTRY BRIEFS

March 15, 1999
Aux Sable Liquid Products LP let contract to Morrison Knudsen Corp., Boise, Ida., to build a natural gas liquids extraction and fractionation plant near Joliet, Ill., at the point where the Alliance natural gas/NGL pipeline will terminate. Morrison Knudsen's project management will involve construction of the plant, including extraction, ethane recovery, and fractionation units. The facility, slated for completion in 2000, will process up to 1.6 bcfd of gas. Nigeria Liquefied Natural Gas

NGL

Aux Sable Liquid Products LP let contract to Morrison Knudsen Corp., Boise, Ida., to build a natural gas liquids extraction and fractionation plant near Joliet, Ill., at the point where the Alliance natural gas/NGL pipeline will terminate. Morrison Knudsen's project management will involve construction of the plant, including extraction, ethane recovery, and fractionation units. The facility, slated for completion in 2000, will process up to 1.6 bcfd of gas.

Nigeria Liquefied Natural Gas
(NLNG) let a $1.5 million contract to MDC Technology, Teesside, U.K., to supply an operational data supervision system at its LNG plant at Bonny Island, Rivers State, Nigeria. The system will enable NLNG to assess, improve, and optimize plant operations through site-wide mass balancing, data reconciliation, advanced process control, and plant and equipment performance control.

Pipelines

Buccaneer Gas Pipeline Co. LLC, a unit of Williams, Tulsa, is holding an open season through Apr. 8 for firm transportation service created by the proposed construction of the Buccaneer natural gas pipeline. The project will extend 420 miles from the Mobile Bay area, near Williams Gas Pipeline-Transco's Compressor Station 82 in Cosden, Ala., across the Gulf Coast to north of Tampa, Fla. An in-service date of April 2002 is projected.

The first phase
of construction of the Alliance pipeline began with the clearing of the rights-of-way of more than 660 km in northwestern Alberta and northeastern British Columbia (OGJ, Dec. 7, 1998, 46). Pipelaying is scheduled to begin May 15 in the U.S. and June 1 in Canada.

Coastal Corp.
unit ANR Pipeline Co., Detroit, applied to the U.S. Federal Energy Regulatory Commission for approval to expand its gas transmission system by 200 MMcfd to serve Wisconsin markets. ANR intends to spend $37.5 million on the project, which will include the installation of an additional 20,000 hp at its Woodstock, Ill., compressor station; the addition of 1,500 hp each at its Janesville, Wis., and Weyauwega, Wis., compressor stations; and the laying of a 3-mile, 42-in. loop line in Kendall County, Ill. An in-service date of November 2000 is anticipated.

Blue Dolphin Energy Co.,
Houston, acquired Black Marlin Pipeline, a 75-mile natural gas and condensate gathering system off Texas, from Enron Pipeline Co., Houston, for an undisclosed sum. Blue Dolphin's partners in the acquisition were MCN Energy Group Inc. unit Mcnic Pipeline & Processing Co. and MDU Resources Group Inc.'s natural gas transmission unit WBI Holdings Inc. Black Marlin has a capacity of 160 MMcfd of gas and 1,500 b/d of condensate and extends from High Island Block 136 across Galveston Bay to Texas City, Tex. As part of the transaction, Blue Dolphin sold 16.6% interest in its system to WBI.

Petrochemicals

Huntsman Corp., Salt Lake City, will close its polypropylene plant at Woodbury, N.J., on Apr. 30. Huntsman opted to shut down the plant due to excess polypropylene capacity, which has reduced prices and margins. Contributing to Huntsman's decision to shut down the plant was Tosco Corp.'s recent decision to discontinue its long-term supply arrangement with Huntsman. Tosco will use the propylene feed in a polypropylene plant it will build in New Jersey (OGJ, Feb. 15, 1999, p. 26). The Huntsman plant produces 400 million lb/year of homopolymer polypropylene.

Borealis AS,
Copenhagen, and Huntsman signed a 2-year marketing agreement for flexible polyolefins (FPO) in Europe. Under the agreement, Borealis will sell Hunstman's Rexflex-FPO products in Europe, while Huntsman studies the viability of establishing a European production base. Huntsman manufactures this polypropylene range at Odessa, Tex.

Gas marketing

Reliant Energy (formerly Houston Industries), Houston, acquired certain assets of the retail natural gas marketing businesses of National Energy Management LLC, a joint venture of PanCanadian Energy Services Inc. and two units of Madison Gas & Electric. Reliant also acquired the Chicago assets of Koch Industries Inc. unit Koch Midstream Services Co., Wichita. The two acquisitions represent revenues of over $65 million/year. The purchase is in line with Reliant's plans to expand into the mid-market retail gas business.

Drilling-production

EDC Ecuador Ltd., a unit of Noble Affiliates Inc., Ardmore, Okla., will begin development of Amistad gas field in the Gulf of Guayaquil off Ecuador. EDC will award a platform construction contract in July and install the platform in 2000. Four directional wells and a 40-mile pipeline to shore are planned. State firm Petroecuador will receive a portion of production. The portion of Amistad to be developed has gross estimated gas reserves of 345 bcf. Production will be sold to a proposed 240-MW combined-cycle power plant, to be built near Machala, Ecuador, by an EDC affiliate and Marathon Power Capella Ltd. Field development cost is estimated at $78 million.

U.S. Environmental Protection Agency
banned discharges in four more environmentally sensitive areas of Alaska's Cook Inlet. EPA issued a new permit for the inlet's 16 production platforms, which together discharge 2 billion gal/year of waste water. The platforms are currentlybanned from discharging in 12 environmentally sensitive areas.

Statoil AS
let a pre-engineering contract for an undisclosed sum to Aker Maritime AS, Oslo. The contract involves the development of a drilling derrick, substructure, and mud module that will be installed on a planned platform to be built for Kvitebj rn field in the Norwegian North Sea. Kvitebj rn has estimated reserves of 131 million bbl of oil and 1.65 tcf of gas and is expected to be developed with a small platform standing in 190 m of water (OGJ, Aug. 17, 1998, p. 80). The reservoir is at a depth of 4,022 m, and Aker expects it to be produced with nine wells.

Algeria's
Qoubba field oil reserves were revised upward to more than 1.1 billion bbl. The new field estimates follow the encouraging results of two wells drilled last year by Spanish oil firm Cepsa. The field, also known as Oughroud, is expected to produce up to 230,000 b/d of oil in the next few years.

Elf Aquitaine
unit Elf Petroleum Asia started gas and condensate production in Maharaja-Lela field off Brunei. Operator Elf holds a 37.5% interest in the field, which lies in 70 m of water on Brunei's Block B. The field was developed with two unmanned platforms tied back by an 85-km multiphase pipeline to an onshore terminal at Lumut. Initial production was 105 MMcfd of gas and 2,000 b/d of liquids. The gas is delivered to the Brunei liquefied natural gas plant, and liquids are sent to the Seria terminal for export. Maharaja-Lela is the first field Elf has operated in Asia and was brought on stream in less than 2 years at a cost of $250 million.

Power

El Paso Energy International Co., Houston, acquired from Energy Equity Corp. Ltd. a 26% interest in the $295 million power project at Pillaiperumanallur, in India's Tamil Nadu state. The project is comprised of a 346-MW combined-cycle power plant, still under construction, which will market power under a 30-year agreement to state-owned Tamil Nadu Electricity Board (OGJ, Jan. 18, 1999, p. 30). Partners in the project include Reddy Group, Marubeni Corp., and Public Service Enterprise Group unit PSEG Global. The plant is scheduled to be operational in April 2001.

Refining

Nigerian National Petroleum Corp. (NNPC) intends to have its 60,000 b/d refinery at Port Harcourt back on stream by the end of March. The refinery has been idle since 1996 and was the second of the country's four refineries to undergo turnaround maintenance. NNPC restarted its Kaduna refinery earlier this year (OGJ, Feb. 15, 1999, p. 36).

Petroleos de Portugal SA
(Petrogal) let a $16 million contract to Foster Wheeler France SA for the engineering, procurement, management, and construction of a Platformate-splitting project at Petrogal's Porto refinery. Foster Wheeler will provide a splitter that produces three side cuts: an overhead light, a heart cut, and a heavy cut. The light and heavy cuts will have a benzene content of less than 1 vol %. The heart cut will have benzene content of 40-50 wt % and will be used to feed the Arosolvan benzene-toluene extraction unit at the Porto aromatics complex.

Alternate fuels

Sweden's Lycksele Energi AB let a $16 million contract to Foster Wheeler Corp.'s Finland unit, Foster Wheeler Energia Oy, for the supply of a 47-MW biofueled circulating fluidized-bed (CFB) boiler for Lycksele Energi's cogeneration plant at Lycksele, Sweden. Biofuels, such as wood waste, will be used to fire the new plant. The project is slated for completion in early 2001.

Retail marketing

Phillips-Imperial Petroleum Ltd., Woking, England, began producing ultralow-sulfur diesel (ULSD) as its core product. ULSD, refined from low-sulfur Ekofisk crude, has a sulfur content of 50 ppm. Production of ULSD follows British Petroleum Co. plc's recent introduction of a similar fuel to the U.K. market.

Companies

Woodside Petroleum Ltd., Melbourne, acquired a 10% stake in Kipper field and 23.5% of the Basker-Manta-Gummy fields in the eastern offshore sector of the Gippsland basin from Australian Worldwide Exploration NL (AWE) for $18 million (Australian). Kipper was recently earmarked for development to supplement gas supplies from Bass Strait fields. The purchase is part of Woodside's plans to establish itself in the Victoria natural gas market. AWE last year proposed a development plan for the fields involving piping the gas to a processing plant to be built near Orbost, Australia, about 200 km from the Esso-BHP Longford plant.

Dominion Energy Inc.,
Richmond, Va., plans to acquire Remington Energy Ltd., Calgary, for $50 million (Canadian). The deal's estimated value is $390 million, including assumed debt. After closing, Dominion will have more than 1 tcfe of reserves in North America and will produce about 350 MMcfed.

Octel Corp.
unit Octel America Inc., Newark, formed a 50-50 joint venture of its North America operations with Starreon Corp., Denver. The combine, to be called Octel Starreon LLC and based in Denver, will merge the finished fuel additives units of both companies in the U.S. and Canada, excluding the companies' tetraethyl lead units. The new venture had pro forma sales in 1998 of $27 million.

Courts

The Oklahoma Supreme Court upheld the 1996 judgment of a trial court that awarded Occidental Petroleum Corp. unit Oxy USA Inc. $742.2 million in a breach-of-contract case against Chevron Corp., which stems from a 1982 merger agreement between Oxy USA predecessor Cities Service Co. and Chevron acquisition Gulf Oil Corp. (OGJ, July 29, 1996, p. 54). Chevron had appealed the case to the Supreme Court in 1996. Due to the accrual of interest, the award totals about $935 million, the largest amount awarded in Oklahoma's history.

Exploration

Shell Deepwater Development Inc. completed a deepwater discovery well on the Habanero prospect on Garden Banks Block 341 in 2,000 ft of water. The well, drilled to a measured depth of 21,158 ft, found 200 ft of net pay in two zones. Partners in the block are operator Shell 55%; Murphy Oil Corp., El Dorado, Ark., 33.75%; and Callon Petroleum Co., Natchez, Miss., 11.25%.

Burlington Resources Inc.,
Houston, began drilling the first of three exploration wells on the 525,000-acre Delta Centro block in eastern Venezuela. Jarina 1X, to be drilled to 15,600 ft TD, will test Miocene Oficina and Cretaceous Temblador sandstones in the Wakajara prospect. Drilling is expected to take 90 days. Partners in the block are operator Burlington 35%; Union Pacific Resources, Fort Worth, 35%; and Benton Oil & Gas Co., Carpinteria, Calif., 30%.

Kazakh national oil firm
Kazakhoil and Japan National Oil Corp. (JNOC) intend to sign an agreement to jointly explore for oil and gas off Kazakhstan. Kazakhoil will lead the exploration project, while JNOC will provide financing. The companies will invest $15 million to study the Mangistausky region in the northeast sector of the Caspian shelf. In 2000, the companies will earmerk a further $25 million for Kazakh exploration, $10 million of which will be spent in the Aral Sea area in 2001.

Lubes

Uzbekistan gave most-favored nation status to 32 countries, including Pakistan, making lubricant exports from Pakistan to Uzbek markets a possibility. The Uzbek government imposes a range of duties on imports-3% for lubricants delivered from a favored country and 6% for those not ranked with favored status. Uzbekistan's lubricant needs-500,000 l./year-are met 100% by imports, mainly from South Korea, Germany, and U.A.E.

Environment

Bangladesh will begin importing unleaded gasoline beginning July 1 in an effort to reduce automobile emissions. Also, Bangladesh intends to place high duties on imports of two-stroke engines and will require that catalytic converters be installed in buses, trucks, and other motorized vehicles.

A U.S. District Court jury
in Helena, Mont., convicted contractor Balko Inc., Conrad, Mont., and its president, John Balkenbush, of violating underground injection control rules. Balko allegedly injected wastewater and other production fluids into three abandoned wells in Pondera County, although it did not have permits. Balko could be fined up to $500,000, and Balkenbush faces up to 3 years in prison and/or a $250,000 fine.

Copyright 1999 Oil & Gas Journal. All Rights Reserved.