• Subscribe
  • Magazine
  • Past Issues
  • Surveys
  • Industry Statistics
  • About Us
  • Members Only
    1. General Interest
    2. Companies

    INDUSTRY BRIEFS

    April 5, 1999
    A Mar. 25 explosion and fire in the hydrocracker at Chevron Corp.'s Richmond, Calif., refinery was isolated, and the fire was extinguished in only 2 hr, said Chevron. At presstime, the unit remained shut down, and the cause of the explosion was under investigation. Production of gasoline is continuing at the refinery, although at reduced levels. None of the 30 workers at the unit was injured. Uzbekistan's Uzbekneftigas

    Kendall Energy LLC,
    a unit of independent power producer LS Power LLC, East Brunswick, N.J., plans to build, own, and operate a 1,100-MW natural gas-fired combined-cycle power plant in Kendall County, Ill., about 30 miles southwest of Chicago. Long-term power purchase agreements have already been signed with Minnesota Power Inc., Duluth, Minn., for 275 MW and with Dynegy Inc., Houston, for 550 MW. Kendall plans to begin construction on the plant by summer with an in-service date of summer 2001.

    Panda Energy International Inc.,
    Dallas, plans to build a $400 million natural gas-fired power plant in Union County, Ark., next to Entergy Corp.'s El Dorado switching station, northeast of El Dorado. Capacity will be 1,800-2,200 MW. The plant, to be called Union Power Partners, will feed power into the Southeastern Electric Reliability Council grid. Construction of the plant is scheduled for 2000, with start-up slated for 2002.

    AES Corp.
    unit AES Transpower Holding Pty. Ltd., Arlington, Va., won a bid to acquire the assets of Ecogen Energy, a state firm of Victoria, Australia, for $350 million (Australian). The assets include two gas-fired power plants-Newport and Jeeralang-in Victoria with a total installed capacity of 966 MW.

    Exploration

    Mariner Energy Inc., Houston, completed production testing at its Dulcimer discovery on Garden Banks Block 367 in the Gulf of Mexico. On test, the well flowed 64 MMcfd of gas from two zones at 9,900-10,500 ft. The well, in 1,145 ft of water, is tied back by two flow lines to Garden Banks 236 production platform. Block interest holders are operator Mariner 42%, Spinnaker Exploration Co. LLC 33%, and Pogo Producing Co. 25%.

    Chieftain International Inc.,
    Edmonton, and Equitable Production Co. made an oil discovery on South Timbalier Block 196 off Louisiana in the Gulf of Mexico. The block's No. 1 well was drilled to 12,098 ft TD and encountered more than 110 net ft of hydrocarbon-bearing pay in five zones. The 50-50 partners plan to drill appraisal wells before designing production facilities.

    Exxon Corp.
    unit Exxon South Caspian Ltd. signed a production-sharing agreement and acquired a participating interest in the Araz-Alov-Sharg block in the Azerbaijan sector of the Caspian Sea. The block is 110 miles south-southeast of Baku and covers about 550 sq miles in 1,300-3,000 ft of water. The block's interest holders are Exxon 15%, State Oil Co. of the Azerbaijan Republic 40%, BP Amoco plc 15%, Statoil AS 15%, Turkey's state-owned petroleum firm Turkiye Petrolleri AO 10%, and Alberta Energy Co. 5%.

    Drilling-production

    Santa Fe Energy Resources Inc., Houston, tested two wells in the South Timbalier area. South Timbalier 186 C-1, in an area owned 100% by Santa Fe, flowed 20.2 MMcfd of gas and more than 1,779 b/d of condensate through a 21/64-in. choke with 6,350 psi flowing tubing pressure from an interval at 13,390-470 ft. South Timbalier 186 C-2, in an area owned 87.5% by Santa Fe and 12.5% by British Borneo Exploration Inc., flowed 12.6 MMcfd of gas and 411 b/d of condensate through a 26/64-in. choke with 6,600 psi flowing tubing pressure from a perforated interval at 15,234-257 ft.

    Medusa Oil & Gas,
    a unit of Aberdeen-based Ramco Energy plc, and partner Moravsk? Naflov? Doly AS, the former Czech state oil firm, began production from Krumvir-2 well on Karlin block of the Czech Republic (OGJ, Feb. 16, 1998, p. 38). The well, about 30 km southeast of Brno and 100 km northeast of Vienna, was put on long-term production at restricted rates of 2 MMcfd of gas and 150 b/d of oil. Interests in the block are operator Medusa 48% and Moravsk? 52%. The partners plan another well in the Krumvir area this year.

    Britannia Operator Ltd.
    (BOL), the joint venture of Chevron U.K. Ltd. and Conoco (U.K.) Ltd. established to develop and operate Britannia field, stopped production on Mar. 19. BOL said the flow of gas and condensate was shut in as a precautionary measure after routine inspection indicated the potential for anomalies in gas process pipe work on Britannia platform. The operator said the situation is not dangerous, and the crew of 140 is not at risk. Britannia lies on U.K. North Sea Block 16/26 and produced an estimated 600 MMcfd of gas and 46,000 b/d of condensate in December. The field started up in August 1998.

    Companies

    Northern States Power (NSP), Minneapolis, and New Century Energies (NCE), Denver, plan to merge in a tax-free, stock-for-stock deal reportedly valued at $4.66 billion. NCE stockholders will receive 1.55 shares of stock in the new company for each NCE share. NSP shares will be exchanged at a 1-to-1 ratio. The merged company, yet to be named, will provide 3 million customers with electricity and about 1.5 million with natural gas in 12 U.S. states. The company will also serve about 2 million electricity users and 400,000 natural gas customers in the U.K.

    Shareholders of
    Ocean Energy Inc. and Seagull Energy Corp., both of Houston, approved the merger of the two companies (OGJ, Dec. 28, 1998, p. 26). Both firms are divesting assets to reduce debt (OGJ, Jan. 18, 1999, p. 30). In a separate transaction, Quintana Minerals Canada Corp., Calgary, a unit of Quintana Energy, Houston, acquired the Canadian assets of Ocean Energy for $112 million (Canadian). The properties, in the Peace River area of Alberta, have production of 7,000 boed.

    Edison International
    unit Edison Mission Energy, Rosemead, Calif., acquired a 40% stake in New Zealand's state-owned natural gas/hydro/ geothermal/power utility Contact Energy Ltd. for $625 million. The deal is contingent on New Zealand making an initial public offering of the remaining 60% of Contact Energy, which is expected to occur in mid-April.

    Midcoast Energy Resources Inc.,
    Houston, acquired Flare LLC, Columbia, Miss., and Dufour Petroleum Inc. (DPI), Petal, Miss., for $11.1 million in cash, stock, and assumed debt. Flare is a natural gas processor, and DPI transports and markets NGL, crude oil, and CO2. In a separate transaction, Midcoast unit Midcoast Canada Operating Corp. acquired the Calmar gas treating plant and gathering system in Alberta from Probe Exploration Inc., Calgary, for $20 million (Canadian). Included are a 30 MMcfd amine sweetening unit, 30 miles of 10-in. and 6-in. gathering lines, and about 4,000 hp of compression. The gathering system collects 26 MMcfd of sour gas. Probe will sign a long-term gathering and treating agreement with Midcoast.

    Pacalta Resources Ltd.,
    Calgary, formally rejected a $735.7 million (Canadian) takeover bid from Alberta Energy Co. Ltd., Calgary (OGJ, Mar. 22, 1999, p. 38). Outside advisers considered the offer inadequate, said Pacalta. Pacalta has adopted a shareholders rights plan to make a takeover more costly.

    CMS Energy Corp.,
    Dearborn, Mich., completed its $2.2 billion acquisition of Panhandle Eastern Pipe Line Co., Trunkline Gas Co., and Trunkline LNG Co. from Duke Energy Corp., Charlotte, N.C. (OGJ, Mar. 29, 1999, p. 30).

    Financing

    CMS Energy obtained $562.5 million in financing from a group of banks led by Barclays Bank of the U.A.E. for the construction of the $750 million, 710-MW gas-fired Al Taweelah A2 power plant and desalination complex on the Persian Gulf coast. Operator CMS 40% and Abu Dhabi Water & Electricity Authority 60% finalized a joint venture for the project in fourth quarter 1998 (OGJ, Nov. 9, 1998, p. 46). Start-up is slated for August 2001.

    Gas distribution

    Australian Gas Light Co. (AGL) acquired a 920-km natural gas distribution system-New Zealand's third largest-for $112 million (New Zealand). The pipeline network serves 26,000 sites in the Hutt Valley and Porirua region near the capital Wellington from TransAlta New Zealand Pty Ltd., a unit of TransAlta Corp., Calgary. The deal gives AGL its first direct ownership of a New Zealand energy firm.

    Coalbed methane

    PennzEnergy Co., Houston, and Sonat Exploration Co., a unit of Sonat Inc., Birmingham, Ala., formed a joint venture to develop mineral interests underlain by coalbed methane in the Raton basin at the 700,000-acre Vermejo Park Ranch in northeastern New Mexico. Sonat will pay up to $10 million and will subsidize a development program in order to earn a 36-year lease on a portion of PennzEnergy's Vermejo Park mineral interest and neighboring interests. PennzEnergy will have an initial working interest of 25% in the venture, and will retain a royalty of 25% in its lease to Sonat. PennzEnergy's working interest will increase incrementally to 50% as progress is made on the project.

    Pipelines

    Burlington Resources Inc., Houston, signed an agreement with Enron Capital & Trade Resources Corp. (ECT), Houston, to form Lost Creek Gathering Co. LLC. Lost Creek will build a 124-mile, 24-in. natural gas gathering system from Madden field in central Wyoming to a point near Wamsutter, Wyo. Burlington will hold a 65% interest in the project, and ECT will hold the remaining 35%. Initial deliveries are anticipated during first quarter 2000; construction will begin shortly.

    Gas processing

    Air Liquide Canada Inc., Montreal, will build a $150 million (Canadian) gas processing and power plant at Scotford, Alta. The plant will serve an existing styrene monomer plant and a $350 million monoethylene glycol plant under construction at Scotford by Shell Chemicals Canada Ltd. The plant's start-up is slated for mid-2000.

    Shell Deepwater Production Inc.
    signed an agreement with Canadian Chemical Reclaiming Ltd. (CCRL) to license CCRL's technology for the reclamation and purification of monoethylene glycol for Shell's Mensa gas production facility in the Gulf of Mexico. The subsea Mensa project, which covers several blocks in the Mississippi Canyon area, is 140 miles southeast of New Orleans in 5,300 ft of water.

    Terminals

    Coastal Corp. unit Coastal Liquids Partners LP, Houston, commissioned a refined products terminal at Edinburg, Tex., on 11 acres about 15 miles north of McAllen, Tex. An 8-in. pipeline linked to refineries at Corpus Christi, Tex., will supply the terminal.

    Tankers

    Chevron Corp. launched a 308,500 dwt, double-hull tanker at Koje, South Korea. The vessel, named J. Bennett Johnson, is one of the two largest of Chevron's 12 double-hull ships and is the second of four being built for Chevron by Samsung Heavy Industries Co., Seoul (OGJ, Dec. 7, 1998, p. 44). The 2.2 million bbl tanker will transport oil from the Middle East to Chevron's U.S. Gulf Coast and West Coast refineries.

    Copyright 1999 Oil & Gas Journal. All Rights Reserved.

    Continue Reading