Gas processing
Shell Philippines Exploration BV
let a multimillion-dollar contract to Foster Wheeler Corp., Clinton, N.J., for the engineering, procurement, and construction of an onshore Philippines gas processing plant. The plant, which comprises the last phase of the Malampaya deepwater gas-to-power project off the Philippines, will be built in the Tabangao area on Luzon Island. The plant will deliver 500 MMscfd of sweet, dry gas via an onshore pipeline system and will have two parallel gas processing trains. First offshore gas deliveries to the Philippines are expected to begin in October 2001.
Exploration
Phillips China Inc.,
a unit of Phillips Petroleum Co., discovered oil and gas on a 6-mile anticline on Block 11/05 in 75 ft of water in China`s Bohai Bay. Discovery well PL 19-3-1 reached 5,531 ft TD and cut 1,400 ft of gross pay, 712 ft of which was net pay in the Minghuazhen and Guantao formations, said Phillips. Appraisal well PL 19-3-2 followed and was drilled to 5,325 ft TD, cutting 1,700 ft of gross pay, 748 ft of which was net pay in the same formations as PL 19-3-1. The well was flow tested three times. The first two tests yielded 700-800 b/d of 22? gravity oil with a gas-to-oil ratio of 250-300 scf/bbl. Phillips plans to drill five additional wells before yearend.
Oil & Gas Development Corp.
(OGDC) discovered what the state firm is calling "substantial" oil and gas reserves in the Sadqal area, 45 km south of Islamabad near Fateh Jang, Pakistan. Well No. 5 flowed 2,500 b/d of 40° gravity oil and 18.5 MMcfd of gas through a 1/2-in. choke with 4,600 psi flowing tubing pressure. The well was drilled to a target depth of 3,678 m and cut Eocene Margalla Hill limestone at 3,543 m.
Ocean Energy Inc.,
Houston, and Duke Energy Hydrocarbons LLC signed a drilling program agreement for certain drilling projects on the Outer Continental Shelf in the Gulf of Mexico. Duke will take part in up to a 50% nonoperating working interest in 13 of Ocean Energy`s exploratory drilling prospects, on which the companies expect to spud in the second half. The partners anticipate drilling costs to reach $40 million through yearend.
Kerr-McGee do Brasil Ltda.,
a unit of Kerr-McGee Corp., Oklahoma City, signed an agreement entering into a joint venture with Petroleo Brasileiro SA (Petrobras) and Exxon unit Esso Brasileira de Petroleo Ltda. for the exploration of Block BS-1 in the Santos basin off Brazil. Operator Kerr-McGee and Petrobras will each hold 40% interest in the block, while the Exxon unit will hold 20%. BS-1 lies next to Kerr-McGee`s Block BM-S-3, which it won during the recent Brazilian exploration license round (OGJ, June 28, 1999, p. 31).
Pipelines
Duke Energy Southeast Pipeline Corp.,
a unit of Duke Energy Corp., Charlotte, N.C., plans to build, own, and operate a 36-in. natural gas interstate pipeline system that will transport as much as 1 bcfd of gas to markets in the U.S. Southeast. The proposed Sawgrass Energy transmission system, which could cost as much as $1.3 billion to build, will begin near Coden, Ala., and extend through southern Mobile Bay into Florida; an exact terminus is yet to be determined. An in-service date of 2003 is envisioned. Duke is performing a detailed route analysis. Duke Energy North America, Duke`s wholesale power generation development unit, has committed to take 250 MMcfd of gas from the planned pipeline.
Gas storage
A consortium
of natural gas companies comprising New York State Electric & Gas Corp., Gaz de France, and Swedish firm Sydkraft plans to take part in a high-deliverability gas storage evaluation project in the U.S. Northeast. The project, which will use lined-rock cavern (LRC) technology, involves lining rock caverns with steel, enabling the storage of up to 3 bcf of gas at pressures of 3,500 psi. The average projected cost of using LRC per dekatherm of daily deliverability is estimated at $8/month. Phase 1 of the project will involve a review of probable sites and other market analysis. The firms envision an in-service date of winter 2004-05.
Companies
Texaco Inc.
signed an agreement to take a 42.5% interest in the Campos basin BC-4 exploration block and the Frade oil field development area off Brazil in partnership with Petrobras, Japanese group Nissho Iwai/Inpex, and Brazilian service firm Odebrecht. Texaco will serve as operator of both blocks, which are in the Campos basin about 300 km east of Rio de Janeiro. A proposed Frade development project could cost as much as $1.2 billion and lead to production of 100,000 b/d of oil.
Agip Algeria Exploration BV
acquired the combined interests of Anadarko Petroleum Corp., Houston, and Lasmo plc, London, in Blocks 401a and 402a in the Berkine basin of Algeria`s Sahara Desert for a total of $127 million. Anadarko held a 27% interest in both blocks-which are operated by BHP Petroleum Pty. Ltd.-while Lasmo held 13.75%. The two blocks contain oil discoveries now being evaluated for development; one find extends into Agip`s adjacent Block 403 license area. Anadarko said the sale brought better value from a nonoperated property, while Lasmo said the blocks were noncore assets. Both companies retain interests in nearby Blocks 404a and 208, where Anadarko is operator.
Argentina`s YPF SA
let a $95 million contract to Weatherford Global Compression Services-the compression unit of Weatherford International Inc., Houston-to provide leasing, operations, and maintenance for a series of its natural gas compression stations in Argentina with total compression of about 78,000 hp. The contract marks the first of its kind for the unit in Argentina.
Coastal Oil & Gas Corp.
acquired the Hell`s Hole and Park Mountain field assets of Mitchell Energy & Development Corp., The Woodlands, Tex., for an undisclosed sum. The assets include 24,000 net leasehold acres with 36 producing wells and related pipelines, gathering systems, and production facilities in Colorado and Utah. Production from the properties is about 6 MMcfd of natural gas.
Lubes
Citgo (Dalian) Co. Ltd.,
a new unit of Citgo Petroleum Corp., Tulsa, plans to build a 50,000 metric ton lubricants blender at Dalian, Liaoning province, China. Construction of the blender, under a $20 million contract, is slated to begin in September, with completion set for a year later. The blender will use Citgo`s blending technology, with basestocks to come from Dalian Petrochemical Corp. and additives from Jinzhou Petrochemical Corp. in Liaoning province. Citgo hopes to expand its market share in mainland China and Southeast Asia for its lubricants products, mainly high-grade motor engine oils.
Drilling-production
U.S. Department of the Interior`s
Minerals Management Service will hold a meeting July 20 in Houston regarding operational issues involved in implementing a natural gas royalty-in-kind pilot project in the Gulf of Mexico. The proposed project is the last of three being implemented by MMS; existing pilot programs were launched in the "8(g)" waters off Texas and on federal leases in Wyoming. The latest pilot is slated to run for 3 years starting this fall. The program involves as much as 800 MMcfd of gas, which is the largest production volume among the three pilots.
Ranger Oil Ltd.,
Calgary, will shut in Banff field to perform maintenance work on an offshore production vessel, thereby cutting its 1999 North Sea oil production by more than 6%. Production from the field will be shut in for 15-20 days to do remedial work on the vessel, including repairs to a windsail damaged in a storm last winter. After the repair work is completed, the field is expected to reach peak production of about 60,000 boe/d by September 1999. The work will defer the planned summer tie-in of Kyle field, and further development plans for Kyle are being considered with regulators. Ranger estimates its 1999 average North Sea production will be 75,000 boe/d, up 8% over 1998 production levels.
Sherritt International Corp.,
Calgary, gauged a hefty flow rate in an appraisal to its Canasi oil discovery on Block 7 between the Cuban cities of Havana and Varadero. Canasi 2, drilled to 2,832 m, flowed 2,500 b/d of oil, which will be sold locally. Partners in the well are operator Sherritt; Pebercan Inc., Ville St. Laurent, Que.; and France`s Maurel & Prom. The well, which was drilled with Pebercan`s rig, penetrated the reservoir at 1,955 m deviated depth; the pay zone was crossed horizontally over 877 m, said Pebercan. The discovery well was drilled earlier this year (OGJ, Feb. 22, 1999, p. 30). The partners plan a third well in the coming weeks.
Mobil Exploration Indonesia Inc.
(MEI) began production from NSOA natural gas field in 350 ft of water off northern Sumatra. MEI operates the field under a production-sharing contract with Indonesian state oil firm Pertamina and holds a 100% working interest in the field. NSO A gas production will supplement that from Arun field in order to sustain liquefied natural gas sales from the Pertamina-owned Arun LNG plant. At peak, the field is expected to produce 450 MMcfd of gas.
Norsk Hydro AS
let a 250 million kroner ($32 million) contract to Kvaerner Oilfield Products AS, Oslo, for subsea equipment to develop Tune gas field in the Norwegian North Sea. Tune will be developed with four subsea wells tied back via seabed template to Oseberg field. Tune is due on stream in 2002 and has estimated reserves of 55 million bbl of condensate and 955 bcf of gas. Production peaks of 35,300 b/d of condensate and 425 MMcfd of gas are anticipated. The field lies on Blocks 30/8 and 30/5 in about 90 m of water.
Petroleum Geo-Services AS
(PGS), Oslo, acquired the new Varg floating production, storage, and offloading vessel from Saga Petroleum AS for $350 million. Saga-recently acquired by Norsk Hydro AS-acted on behalf of Varg oil field license partner Statoil (65%). Saga will lease the ship from PGS for the remainder of Varg field life; the contract is due to last at least 3 years at $177,000/day. Varg was brought on stream in December 1998 and then had estimated reserves of 50 million bbl of oil. Production currently averages 33,000 b/d. Saga said the deal gave it a book-value gain of more than 500 million kroner ($63 million).
Pakistan Petroleum Ltd.,
(PPL) is holding talks with a potential natural gas buyer and marketer in an effort to start production from its joint-venture Block 22 gas reserves in Pakistan in early 2000. Block operator PPL and partner Pyramid Energy Inc., Calgary, began talks with Sui Southern Gas Co. (SSGC) to begin an extended production test of the Hasan X-1 discovery well. The well flowed at 55 MMcfd on an absolute open flow test in March and is about 3 miles from SSGC`s pipeline. Another Block 22 discovery, Hamza X-1, was drilled in April 1998. The JV approved additional delineation drilling and seismic surveys in the area of the discovery wells.
Petrochemicals
Mississippi Chemical Corp.
(MCC), Yazoo City, Miss., curtailed production at the Triad Nitrogen LLC fertilizer production facility at Donaldsonville, La. Beginning Aug. 1, says the firm, Triad`s No. 2 ammonia plant will be shut down indefinitely due to weak market conditions. MCC does not expect to reduce its work force due to the shutdown. The plant has the capacity to produce 621,000 short tons/year of ammonia.
Refining
Shell Oil Co.
and Mexico`s Petroleos Mexicanos let contract to Halliburton Co. unit Kellogg Brown & Root, Houston, for the construction of a new sulfur recovery unit and the expansion of an existing delayed coker at the firms` joint venture Deer Park, Tex., refinery. The expansion project, dubbed Maya II, is scheduled to begin in fourth quarter 1999, is expected to be completed in spring 2001, and will add 60,000 b/d of Maya crude oil processing capacity to the 274,200 b/d plant.
Tankers
Chevron Corp.
launched a 308,500 dwt, double-hull tanker at Koje, South Korea. The vessel, called Richard H. Matzke, is the third of four being built for Chevron by Samsung Heavy Industries Co., Seoul (OGJ, Apr. 5, 1999, p. 40); it is among the four largest in the company`s fleet of 13 double-hull ships. The tanker, to be delivered in early 2000, will first transport oil cargoes of about 2.2 million bbl from the Middle East to Chevron`s refinery at Pascagoula, Miss. Later, the tanker will transport crude to Chevron`s U.S. West Coast refineries.
Gas supply
Pakistan`s Petroleum Ministry
will likely approve an agreement for SSGC to purchase an additional 40 MMcfd of gas from Union Texas Pakistan (UTP), which operates Badin gas field in Pakistan. Reportedly, negotiations are complete between SSGC and UTP for an initial price of $1.50/ MMBTU; SSGC is already buying 125 MMcfd of gas from UTP. The gas will serve to cover SSGC`s shortfall in supply for its customers in Sindh and Balochistan provinces.
Pertamina`s
plans to sell natural gas to Singapore utility Singapore Power are on hold over a price dispute. Pertamina said that it will reconsider the proposal after Singapore Power indicated it would reduce the amount of gas it would take. The firms signed a memorandum of understanding with Santa Fe Energy Resources Inc., Houston, and Gulf Canada Resources Ltd., Calgary, last September for the supply of 150 MMscfd of gas from Sumatra`s Jabung block in 2001 (OGJ, Sept. 28, 1998, p. 44). If talks do not resume, Pertamina says it would consider alternative uses for the gas, such as transporting it to gas-needy West Java.
Oilsands
Syncrude Canada Ltd.,
Fort McMurray, Alta., retired its Dragline No. 2, named Discovery, on July 8. The shutdown comes after 22 years, or about 101,000 operating hr, during which time the dragline mined 312 million cu m of oilsands. Discovery was one of four draglines used by Syncrude in its base mine at Mildred Lake, Alta., and is the first of the lines to be retired. The draglines at Syncrude`s North Mine and its Aurora project are being replaced gradually with trucks and hydrotransport. Syncrude plans to retire another dragline and bucketwheel train in early 2000.