INDUSTRY BRIEFS

Gas marketing

Qatar General Petroleum Corp. (QGPC) plans to supply natural gas to the U.A.E. and Oman under a deal forged by the United Arab Emirates Offset Group (UOG). UOG is a government unit established in Abu Dhabi to promote industrial ventures. Under the contract, up to 3 bcfd of gas would be supplied to U.A.E. and Oman for use in petrochemical plants, power generation plants, and other gas-consuming industries. UOG anticipates spending $8-10 billion over the next 6-7 years on a number of projects based around the gas supply deal.

Refining

Exxon Co. USA was unable to successfully restart the catalytic cracking unit at its Benicia, Calif., refinery following recent turnaround maintenance. The unit, which was shut down Mar. 18, is expected to be down for a few more weeks. In the meantime, Exxon will meet its customers' needs using product from its Gulf Coast refineries. The Benicia refinery will remain operational while repairs to the catalytic cracker are being performed.

Petroleos Mexicanos
unit Pemex Refinacion Co. let contract to Foster Wheeler Corp., Clinton, N.J., for project management services related to the revamp of its Antonio M. Amor refinery at Salamanca, Guanajuato state, Mexico. Pemex has yet to award the engineering, procurement, and construction contract for the project. Work on the project is slated for completion in 2001 (OGJ, Mar. 15, 1999, Newsletter).

Irving Oil Ltd.,
Saint John, N.B., will call for bidders in April for the next phase of a $750 million (Canadian) revamp of its Saint John refinery. Irving expects to award construction contracts valued at about $300 million in the next 9 months. Fluor Daniel Ltd. has been named project manager. Work on the 250,000 b/d refinery will include installation of: a 120,000 b/d crude distillation unit, a 70,000 b/d residue fluid catalytic cracker, an 8,000 b/d sulfuric-acid alkylation unit and associated acid regenerator, a sulfur plant tail-gas unit, an amine sulfur-recovery unit, and a sour water stripper.

Enron Corp.'s
Canadian unit Enron Capital & Trade Resources Canada Corp. filed documents in a Calgary court seeking to have Blue Range Resource Corp., Calgary, put into bankruptcy. Blue Range is under court protection from creditors while its new owner, Big Bear Exploration Ltd., Calgary, sells assets and reorganizes operations. Enron is a major unsecured creditor of Blue Range. Big Bear terminated $49 million (Canadian) in gas contracts after Blue Range was granted court protection.

Fracmaster Ltd.,
Calgary, filed for court protection in Calgary after being unable to service a $7.5 million (Canadian) debt. The firm, with operations in Canada, the U.S., and the former Soviet Union, said it is insolvent and has more than $134.5 million in debt. Arthur Andersen Inc. was appointed to monitor the company while it continues to operate and tries to restructure. Fracmaster was affected by low oil prices and reduced demand for well services.

Exploration

Conoco Inc. unit Conoco Venezuela made an oil discovery on the Gulf of Paria West block, 160 miles east of Puerto La Cruz, off Venezuela. Corocoro 1X, drilled to a depth of 12,100 ft in 8 ft of water, encountered several hydrocarbon-bearing zones. On test, three of the zones-ranging in depth from 5,950 ft to 9,080 ft-flowed at a cumulative rate of 4,195 b/d of oil. The fourth zone flowed 10.6 MMcfd of gas and 287 b/d of condensate. Interest holders in the block are operator Conoco 50%, Agip Venezuela BV 40%, and Taiwan's Chinese Petroleum Corp. unit Overseas Petroleum & Investment Corp. 10%.

Pipelines

Plains All American Pipeline LP, Houston, plans to acquire Scurlock Permian LLC and certain other pipeline assets from Marathon Ashland Petroleum LLC for about $138 million in cash. The deal, pending regulatory review and approval, is expected to close in second quarter 1999.

Pakistan's Cabinet Committee on Investment
approved a proposal to award the White Oil pipeline project to Pak Arab Refinery Co. Ltd. (Parco) for laying an 800-km pipeline from Karachi to Mehmood Kot near Multan, Punjab province. The contract was awarded on a build, own, and operate basis. Parco is building a refinery at Mehmood Kot (OGJ, Mar. 8, 1999, p. 40).

Tennessee Gas Pipeline Co.,
a unit of El Paso Energy Corp., filed an application with the Federal Energy Regulatory Commission for its Eastern Express Project 2000. The project will provide firm transportation service beginning November 2000 from the interconnect with the Portland Natural Gas Transmission system at Haverhill, Mass., and the proposed interconnect with the Maritimes & Northeast pipeline at Dracut, Mass. Shippers have already signed firm transportation contracts for about 170 MMcfd. The capacity will be used mostly to serve new gas-fired power plants in the New England area.

TransMontaigne Inc.,
Denver, and Colonial Pipeline Co., Atlanta, will build a barge dock facility on the Mississippi River, 29 miles north of Baton Rouge. TransMontaigne will build, own, and operate the marine loading and unloading facility. The dock will handle volumes exceeding 50,000 b/d, manage simultaneous deliveries to and from a neighboring Colonial tank farm, and handle the loading of multiple barges at rates of more than 14,000 bbl/hr. Colonial will build several connecting lines and operate a new pump station at its Baton Rouge tank farm.

Petrochemicals

Methanex Corp., Vancouver, B.C., will close its 260,000 metric ton/year methanol plant at Medicine Hat, Alta. Its remaining plant at Medicine Hat produces 570,000 tons/year for markets in Canada and U.S. West Coast and Rocky Mountain states. Methanex has seven other plants in Canada, the U.S., and New Zealand and is about to open a third plant in Chile.

Shell Chemicals Canada Ltd.
and Dow Chemical Canada Inc. signed a letter of intent for a long-term styrene monomer supply contract. Under the proposed deal, Shell would supply a significant proportion of styrene output from its Scotford, Alta., plant to Dow's styrene derivatives units in North America. Martin Kuzaj, Shell's business manager, said: "This agreement is an extension of the successful supplier/purchaser relationship with Dow, which started in early 1998."

Indian Petrochemicals Corp.
will build a $350 million polypropylene plant at Qatar's Mesaieed industrial area. Financing will be provided by Persian Gulf consortium M.B. International. Bechtel will serve as technical contractor for the 250,000 metric ton/year plant, which will use technology licensed from UOP LLC, Des Plaines, Ill.

Drilling-production

Occidental of Bangladesh Ltd. started up natural gas production from Jalalabad field on Block 13 in Bangladesh's Sylhet province. Operator Occidental and Unocal Bangladesh Ltd. are developing Jalalabad under a production-sharing agreement with state firm Petrobangla. Initial deliveries to Petrobangla began Feb. 6; current production is 100 MMcfd of gas, an amount equivalent to about 12% of the country's gas demand. The field also produces 2,000 b/d of condensate, which doubles Bangladesh's output. Development of Jalalabad, with an estimated 1.6 tcf of gas in place, began in early 1998.

Petrobras Bolivia SA
announced test results for an appraisal well drilled on the San Alberto block in Gran Chaco province in southern Bolivia. SAL X-9 reached a depth of 4,565 m and cut more than 80 m of gross natural gas pay in the Huamapampa sandstone. The well flowed more than 650 cu m/day of gas and about 65 cu m/day of condensate under normal operating conditions. It confirms the reservoir's high productivity and the existence of very promising potential reserves, said Total. Interest holders are operator Petrobras Bolivia SA 35%, Empresa Petrolera Andina SA 50%, and Total 15%.

India's state-owned
Oil & Natural Gas Corp. is losing an estimated $200,000/day due to the blowout of well B-121-D in Bombay High field off India's west coast that caught fire Mar. 12 (OGJ, Mar. 22, 1999, p. 46). The fire has since spread to two more wells at the $10.4 million B-121 platform, causing its collapse. Preliminary estimates reveal the fire may require 3 months to extinguish. ONGC hopes to kill the fire before mid-June, when monsoon season begins.

A group of companies
brought on stream Tin Fouye Tabankort natural gas field in southeastern Algeria. The field is jointly operated by Total 35%, state firm Sonatrach 35%, and Repsol 30% under a 20-year production-sharing agreement signed in 1996. Production of wet gas began at a rate of 5 million cu m/day and is expected to reach 20 million cu m/day within the next few weeks. Wet gas is separated into dry gas, NGL, and condensate. Development costs for the field are estimated at $700 million.

Gulf Indonesia Resources Ltd.,
Calgary; Talisman (Corridor) Ltd., Calgary; and Indonesia's Pertamina announced the results of the Suban 3 delineation well in the Corridor production-sharing contract area in south Sumatra. Suban 3 is a 2.2-km step-out from the Suban 2 discovery well (OGJ, Jan. 18, 1999, p. 30). On test, a 570-m open-hole interval above 2,540 m flowed at a rate of 27 MMcfd and about 200 b/d of condensate through a 1-in. choke. A shallower 16-m cased interval flowed 82 b/d of 40.6° gravity oil and was calculated to be capable of producing more than 200 b/d of oil. Corridor partners are operator Gulf Indonesia 54%, Talisman 36%, and Pertamina 10%.

Companies

U.S. Federal Trade Commission agreed to allow CMS Energy Inc., Dearborn, Mich., to acquire Panhandle Eastern Pipeline Co., Trunkline Gas Co., and other assets from units of Duke Energy Corp., Charlotte, N.C., if CMS makes space available to shippers if spare capacity on other pipelines falls below certain levels. Otherwise, said FTC, CMS's acquisition of Panhandle Eastern could limit competition in 54 Michigan counties (OGJ, Nov. 9, 1998, p. 37).

Chevron Corp.
units Chevron Chemical Co. LLC and Chevron Pipe Line Co. recently announced plans to reduce operating costs. Chevron Chemical plans to cut 300 jobs by mid-2000 and move its headquarters to Houston by third quarter 1999. Chevron Chemical expects to realize savings of $76 million/year by 2001 through the plan. Chevron Pipe Line will relocate about 200 workers from Salt Lake City; Bakersfield and San Ramon, Calif.; New Orleans; and northern Houston to its Hayes Road facility, 15 miles west of downtown Houston. The pipeline unit will also cut about 100 jobs and realize an annual savings of $15 million by 2000.

El Paso Energy Corp.
unit El Paso Field Services Co. acquired EnCap Investments LC for $52 million in cash and stock. EnCap serves as manager of three individual U.S. institutional oil and gas investment funds and is also manager of Energy Capital Investment Co. plc, a publicly traded investment company based in the U.K. EnCap specializes in the financing of independent oil and gas producers.

Petrofina SA
signed an agreement with Shell Nederland BV to acquire certain service stations in the Netherlands. The assets portfolio represents just over 1% of the Dutch market. At the same time, Norske Shell AS will acquire Fina Europe AS's Norwegian marketing unit Norske Fina AS. The transactions are in concert with Fina's strategy to focus its marketing operations near its refining assets, said Petrofina.

Sharpe Resources Corp.
will acquire Aviva Petroleum Inc. unit Aviva America Inc., Dallas, in a stock swap transaction. Aviva shareholders will receive one new Sharpe share for every six Aviva shares. Sharpe will have about 39 million shares issued and outstanding, of which about 20% will be distributed to current Aviva shareholders and 80% will be held by Sharpe shareholders.

TransAlta New Zealand Ltd.,
a unit of TransAlta Corp., Calgary, will acquire the Rotokawa geothermal steam field and generating plant in northern New Zealand from Utilicorp United Inc. unit United Networks Ltd. for $52.5 million (New Zealand). TransAlta also announced the sale of its majority interest in a natural gas pipeline network north of Wellington to Australian Gas Light Co. for $60 million (U.S.). The companies are partners in Southern Cross Energy, which recently purchased four gas-fired power stations from WMC Ltd. for $230.2 million (Australian).

Research

Gas Research Institute, Chicago, will evaluate worldwide nonconventional natural gas resources in a new $1.1 million study and is seeking producer investment in a Global Emerging Resource Consortium, the group being formed to undertake the study. The 18-month project, co-sponsored by Advanced Resources International Inc., Houston, will assess the types, locations, and sizes of emerging non-U.S. gas resources and study their economics and production viability.

Environment

American Petroleum Institute is leading an industry consortium that will test the toxicity of 350 chemical substances that oil firms make or import. Data from the tests, performed under a voluntary program sponsored by the U.S. Environmental Protection Agency, will be released to the public. The consortium consists of 36 companies, plus the National Petrochemical & Refiners Association, the Gas Processors Association, and the Asphalt Institute.

LPG

Hungarian oil and gas firm MOL Rt. acquired BP Gas Magyarorsz g Kft., the liquefied petroleum gas trading unit of BP Amoco plc. The value of the sale was not disclosed. MOL said the purchase brought it an additional 5% share of Hungary's bulk LPG market, equal to 2% of the total LPG retail market in the country.