INDUSTRY BRIEFS

Exploration

BHP Petroleum Pty. Ltd. unit BHP Petroleum (Trinidad) Ltd. made a natural gas discovery with the first exploration well on its Block 2c production-sharing contract area 40 km off northeastern Trinidad. Angostura-1, in 40 m of water, flowed 30 MMscfd of gas through a 56/64-in. choke during a cased-hole test. BHP plans a second exploration well, Kitchener-1, on neighboring Block 2ab, held by operator BHP 50% and Talisman (Trinidad) Holdings Ltd. Block 2c interest holders include operator BHP 45%, Elf Petroleum Trinidad BV 30%, and Talisman (Trinidad) Ltd. 25%.

BG plc
unit BG Egypt drilled a gas discovery on the West Delta Deep Marine concession in the Nile Delta off Egypt. BG said this is its 10th consecutive find in the Nile Delta in the last 2 years. The WDDM-5 well was drilled in 530 m of water and flowed 45 MMcfd of gas, with the production rate restricted by test equipment. BG is looking to develop the latest find to supply either the Egyptian market or Turkey, the latter via proposed LNG deliveries. Interests are operator BG 50% and Italy's Edison International SpA 50%.

Refining

Pennar Refineries Ltd., a unit of privately owned Indian industrial firm Nagarjuna Group, let contract to ABB Lummus Global, Zurich, for the relocation of the idle Mobil refinery at Woerth, Germany, to the Pennar site at Cuddalore, India. The work includes the engineering of new and existing process units and equipment. The 125,000 b/d refinery is slated for completion during fourth quarter 2001.

French and Ivorian firefighters
returned May 16 to Abidjan, Ivory Coast, to put out a reignited fire they had worked for 2 days, since May 13, to extinguish. The original fire began when a pipeline to an oil storage tank exploded, sending up flames as high as 12 m and threatening crude oil tank farms near the Ste. Ivoirienne de Raffinage refinery. An electrical wire short on the line was blamed for starting the fire.

A fire
that erupted May 13 in the SK Corp. refinery at Ulsan, South Korea, was put out after 16 hr. The blaze began following a "mysterious blast" in a heavy oil cracker at the facility, according to press reports. Four people were injured in the fire, which reportedly gutted the cracker.

Cenco Oil Refining Co.,
Santa Fe Springs, Calif., let a $150 million turnkey contract to LG International Corp., Seoul, and affiliated unit LG Engineering to revamp its Santa Fe Springs refinery. The refinery's previous owner, Powerine Oil Co., had intended to reopen the 46,500 b/d plant in mid-1996 after spending more than $40 million to comply with California air quality regulations (OGJ, Mar. 11, 1996, p. 46). The plant was shut down in July 1995, and was later acquired by Cenco.

Bahrain Petroleum Co.
(Bapco) plans to spend $846 million to revamp its refinery at Sitra, Bahrain. Work on the 63-year-old refinery is slated for completion in 5 years. About $420 million of this sum will be spent to produce low-sulfur diesel in a project based on Bechtel Inc.'s engineering design. Bapco also will spend at least $66 million on new blending facilities for the 248,900 b/d plant.

Petrochemicals

Saudi Petrochemicals Co. (Sadaf), Jubail, plans to double its production of styrene capacity to 1 million metric tons/year using a recently acquired $300 million loan, which will cover 70% of the project's cost. The work, to be performed by Sadaf at Jubail Industrial City, is expected to take 18 months to complete. The loan will also finance the construction of two power stations as part of the project.

Gas marketing

Reliant Energy Services Inc., Houston, signed a natural gas purchase agreement with Quicksilver Resources Inc., Fort Worth, for the supply of 91 bcf of gas over a 10-year period for an assured minimum payment of more than $225 million.

Gas gathering

Sonat Exploration Co., Houston, let a 5-year contract to Koch Midstream Services Co., Houston, for the transportation and treating services of up to 50 MMcfd of gas from Sonat's production in Leon and Freestone counties in East Texas. Exact terms of the agreement were not disclosed. Much of the gas comes from Pinnacle Reef, Travis Peak, and other Cotton Valley horizons. The partnership will enable Sonat to penetrate markets along the Texas Gulf Coast.

Power

Electricit? de France (EdF), under a build-operate-transfer contract signed with Egypt's Electricity Authority, will build two gas-fired, 650-MW power plants in Egypt for a total of $760 million. The project will be funded 30% through EdF's own equity and 70% through loans. EdF will sell the electricity to the Egypt utility at a fixed price, paying itself back over a 20-year period; a second contract has been signed between EdF and Egypt's Gascone & City Gas. Work on the first plant, to be built near the Gulf of Suez, is slated to begin in January 2000 and be completed in July 2002. Construction on the other plant, at Port Said East, will get under way in July 2000 and is to be completed in December 2002. EdF claims it will be able to supply electricity 15% cheaper than the Electricity Authority.

Gas processing

A $1 billion (Australian) class action lawsuit against Esso Australia Ltd., which arose from the 1998 Longford gas explosion and fire, will proceed to trial after the full bench of the Australian Federal Court rejected an attempt by Esso to halt the action. Also, Esso is prevented from taking the matter to the High Court because the company was not granted leave to appeal to the full bench of the Federal Court. The ruling paves the way for 1.2 million Victoria state gas consumers to sue Esso over alleged losses sustained during the 10-day gas shutdown that resulted from damages to the Longford plant (OGJ, Oct. 5, 1998, p. 39). The cost to business of this shutdown has been estimated at $1.3 billion.

Alternate fuels

U.S. Energy Department issued a final rule adding "P-series" fuels to the list of alternate fuels eligible for tax credits. P-series fuels are blends of ethanol, methyltetrahydrofuran (MTHF), natural gas liquids, and butane. The ethanol and MTHF are to be produced from corn, waste paper, cellulosic biomass, agricultural waste, and construction wood waste.

Pipelines

Partners in the Guardian pipeline project let contract to Willbros Group Inc., Tulsa, for management and engineering services on the proposed 147-mile, 36-in. system (OGJ, Mar. 29, 1999, p. 27). Willbros will assist CMS Energy Corp., the project's managing partner, in the preparation of its Federal Energy Regulatory Commission applications. Guardian is expected to be in service by fourth quarter 2002.

Seaway Pipeline Co.,
a general partnership of ARCO and Phillips Petroleum Co. units, plans to increase the capacity of its 30-in. crude oil pipeline by about 110,000 b/d. The increased capacity will come from the addition of three pump stations along the 550-mile pipeline, which transports oil from Freeport, Tex., to Cushing, Okla. Paired with the addition of two crude oil storage tanks, Seaway's capacity will increase by 350,000 b/d by January 2000 (OGJ, Mar. 8, 1999, p. 40).

Retail marketing

Apollo Management LLP, New York, will acquire the retail operations of Clark U.S.A. Inc., St. Louis, for $230 million in a recapitalization transaction. Clark owns and operates 700 company-owned and 200 franchised convenience and gasoline retail stores in the U.S. Midwest. Apollo will retain the Clark and related brand names and has entered into a 2-year supply deal with Clark. Plans call for rebranding later.

Terminals

Caspian Pipeline Consortium, led by Chevron Corp., started construction of the marine terminal for the 900-mile crude oil pipeline from western Kazakhstan to Novorossiisk, Russia (OGJ, Mar. 22, 1999, p. 46). The terminal will have 400,000 cu m of oil storage capacity.

Drilling-production

Aramco Overseas Co. let a fabrication contract to J. Ray McDermott Middle East Inc. for the supply of five jackets, three production deck modules, and the spools, risers, and shrouds for eight pipelines. Under a separate contract, Saudi Arabian Oil Co. hired McDermott to transport and install these facilities, which comprise universal modular platforms, in the Saudi Arabian sector of the Persian Gulf. McDermott will use its Derrick Barge 27 in Abu Safah, Zuluf, Marjan, and Safaniya fields in water depths of 6-50 m. The project is expected to be completed by August 2000.

Nippon Oil Exploration Ltd.,
Tokyo, will acquire a 10% participating interest in development of the 22,400-acre, six-block Kongnan project in the Dagang oil complex in China. Nippon will align with 100% Dagang interest holders Sunwing Energy Ltd. and Black Sea Energy, both of Calgary and still slated to merge (OGJ, Nov. 9, 1998, p. 46). Work on the Dagang project, about 200 km southeast of Beijing, is set to start in June; both Sunwing and Black Sea are in discussions with other possible partners.

Russian oil producer
Permtex, a 50-50 joint venture of Lukoil and SOCO International plc, London, secured a $45 million loan from the European Bank for Reconstruction and Development (EBRD). The money will be used to improve environmental performance on the Perm Oblast concession in the Volga-Urals region, said EBRD. Permtex plans to reduce gas flaring and emissions in a bid to comply with World Bank environmental standards. The project includes improving environmental, health, and safety management standards in the field and improving utilization of gas and water resources.

Companies

Columbia Energy Group, Herndon, Va., withdrew its offer to acquire Consolidated Natural Gas Co. (CNG), Pittsburgh, after the CNG board approved a revised merger agreement from Dominion Resources Inc., Richmond, Va. Dominion's modified offer, which was still less than Columbia's most recent unsolicited offer, was to pay a firm value of $66.60/share to CNG shareholders (OGJ, Apr. 26, 1999, Newsletter).

Enogex Inc.,
a unit of Oklahoma Gas & Electric Co. parent OGE Energy Corp., will acquire the Oklahoma natural gas gatherer, processor, and transporter Transok LLC, Tulsa, from Shell Oil Co. unit Tejas Energy LLC, Houston, for about $700 million. The purchase includes Enogex's assumption of $173 million of long-term debt. The transaction is in concert with Shell's reorganization of its U.S. downstream gas and power assets, enabling the company to focus on its Gulf Coast gas and natural gas liquids transportation and storage business. The integration of Transok with its current system brings Enogex's total pipeline system to 10,000 miles and 3 bcfd of capacity.

Apache Corp.,
Houston, closed the acquisition of certain Gulf of Mexico properties from Shell Exploration & Production Co., Houston, for $715 million plus 1 million shares of Apache common stock (OGJ, May 10, 1999, p. 36). The properties are estimated to contain 127.3 million boe proved reserves, said Apache.

Kinder Morgan Energy Partners LP
closed its acquisition of Chevron Corp.'s 27.13% share in Plantation Pipe Line Co., a unit of Shell Pipe Line Corp., for about $124 million (OGJ, June 29, 1998, p. 40). The transaction boosts Kinder Morgan's ownership holdings to 51.17%. Exxon Pipe Line Co. holds the other 48.83% interest. Plantation, a 3,144-mile system, transports more than 600,00 b/d of gasoline, jet fuel, and diesel to Atlanta, Charlotte, Washington, D. C., and other markets in the U.S. Southeast.

An Alberta court
ordered Fracmaster Ltd., Calgary, into receivership, giving the company until May 21 to seek new bidders. A decision to delay the sale of the firm was granted earlier this month (OGJ, May 10, 1999, p. 36). The judge said the offers already on the table would benefit bankers but not help other creditors.

Tullow Oil plc,
Dublin, announced a joint venture between its subsidiary Tullow India Operations Ltd. and Indian conglomerate Larsen & Toubro Ltd. Under the deal, Tullow India will take over all the oil and gas interests of Larsen & Toubro in exchange for a 10% shareholding in Tullow India. Larsen & Toubro has an option to buy an additional 15% of Tullow India in a period that expires 90 days after the drilling of a new-pool wildcat by the venture on Larsen & Tubro's GK-OSJ-1 block. The block is one of seven exploration and production licenses in which the Indian firm holds interests.

Edison Mission Energy,
a unit of Edison International, Rosemead, Calif., completed its acquisition of a 40% stake in Contact Energy Ltd. from the New Zealand government for $1.2 billion (N.Z.) (OGJ, Apr. 5, 1999, p. 40). The remaining 40% of Contact was sold by New Zealand to the public through an initial public offering, which preceded the closing of Edison's acquisition.

Texas Utilities Co.,
Dallas, changed its name to TXU, which also is the company's stock symbol. The change will affect all U.S. and international subsidiaries of the firm. TU Electric/Lone Star Gas, for example, will be renamed TXU Electric & Gas.

Government

U.S. Minerals Management Service and the Interior Department's Office of Hearings and Appeals amended parts of a rule governing the appeal of MMS orders. One change will ensure that the agencies act on appeals within 33 months. Also, lessees can demonstrate financial solvency in lieu of posting an appeals bond.