INDUSTRY BRIEFS

Aug. 16, 1999
Refining
Calgary firefighters on Aug. 9 brought under control a fire that burned for 10 hr after a series of explosions at Hub Oil Co. Ltd.'s used oil recycling plant in southeastern Calgary, according to local reports. Five workers were reported injured by the blaze. Still unaccounted for at presstime were two plant employees.

Refining

Calgary firefighters
on Aug. 9 brought under control a fire that burned for 10 hr after a series of explosions at Hub Oil Co. Ltd.'s used oil recycling plant in southeastern Calgary, according to local reports. Five workers were reported injured by the blaze. Still unaccounted for at presstime were two plant employees.

Antipinskii Refining,
a unit of Russian oil firm Sibnefteprovod, concluded financial arrangements for a contract it let to Petrofac LLC, Tyler, Tex., for the design and construction of a 10,000 b/d refinery to be built in Russia's Tyumen region of Siberia. The project had been delayed for 2 years due to the country's financial crisis. The distillation unit, which comprises the first phase of the project, is slated for completion in late 1999. The project's second phase-the addition of high-octane gasoline processing units-is scheduled for completion in late 2000.

Gas gathering

Units of Tejas Energy LLC
and Leviathan Gas Pipeline Partners LP formed Nemo Gathering Co. LLC to build a 24-mile, 20-in. natural gas gathering pipeline in the deepwater Gulf of Mexico. Nemo's partnership interests are operator Tejas, 66.08%, and Leviathan, 33.92%. The Nemo line will connect Shell Deepwater Development Inc.'s planned Brutus development project on Green Canyon Block 158 with the interconnect of Manta Ray Offshore Gathering system at a Leviathan-owned platform on Ship Shoal Block 332. Brutus is slated to come on production in late 2001 (OGJ, Apr. 19, 1999, p. 40).

Companies

Canadian Natural Resources Ltd.
(CNR) and Penn West Petroleum Ltd., both of Calgary, acquired BP Amoco plc's Western Canada assets for $1.6 billion (Canadian). The deals consist of five properties adjacent to core lands owned by the buyers. CNR purchased a thermal heavy oil field at Bonnyville, conventional heavy oil assets at Wabasca, and conventional oil and gas at Nipisi, all in Alberta, for a combined $1.06 billion. Penn West bought conventional oil and gas production at Drayton Valley, Alta., and conventional heavy oil and gas assets at Hoosier, Sask., for a total of $540 million.

Newfield Exploration Co.,
Houston, plans to acquire interests in 42 leases in 22 fields in the Gulf of Mexico from Phillips Petroleum Co. for about $22 million.

Cogeneration

DuPont Co.
will build a $250 million, 420-MW natural gas-fired cogeneration plant at its Sabine River Works facility near Orange, Tex. DuPont will operate the plant, while Conoco Global Power will secure the financing and act as project manager. Conoco let contract to Bechtel Energy Corp. for early work on the plant, which is under way. Another Conoco Inc. unit will market part of the plant's power output and all its steam production under long-term contract to DuPont for use at its Orange, Tex., nylon intermediates plant. Under a separate, 10-year contract, Conoco will sell up to 250 MW of power to PG&E Energy Trading-Power LP. Plant start-up is slated for summer 2001.

Exploration

Basin Exploration Inc.,
Denver, made an oil and gas discovery on West Delta Block 63 in the Gulf of Mexico. The well, drilled to about 13,920 ft TVD, cut 117 net ft of oil and gas condensate pay in multiple Miocene sands below 11,000 ft TVD. Operator Basin holds a 50% working interest in the block, while Duke Energy Hydrocarbons LLC holds the remaining interest. Plans are to drill a second well to test another prospect in a separate fault block, said the partners. Afterwards, the firms will either install production facilities on the block or connect production from the property to a nearby platform operated by an outside party.

Burlington Resources Inc.
unit LL&E Algeria Ltd., Algeria state oil firm Sonatrach, and Talisman Energy Inc. unit Talisman (Algeria) BV successfully tested their MLNW-1 wildcat discovery well on Menzel Lejmat Block 405 in the Berkine basin of Algeria. The well cut Strunian F1 oil pay in the Devonian. A total of 20.5 m was perforated and tested, and the well flowed at 8,459 bbl of 42.4? gravity oil and 12.6 MMcfd of natural gas through an 84/64-in. choke with 728 psi flowing wellhead pressure. LL&E Algeria is the well's operator.

Conoco Indonesia Inc.
made another discovery on Block B in the West Natuna Sea (OGJ, June 18, 1999, p. 33). On test, the well flowed a combined 5,375 b/d of oil and condensate and 21 MMcfd of gas from three zones in the deeper Gabus. It also confirmed hydrocarbons in zones equivalent to those in adjacent Belanak field. Before this latest find, Conoco and its Block B partners, Indonesia Petroleum Ltd. and Texaco Inc., logged sufficient reserves to meet their contractual obligations to supply 325 MMcfd of gas from the block to Singapore beginning in 2001.

Total Exploration Production Bolivie SA
discovered additional gas-condensate pay zones on Block XX West in Bolivia's Gran Chaco province. The new zones were discovered by deepening the ITAU X-1 (A) well by 323 m to 5,766 m TD (OGJ, June 14, 1999, p. 38); they include 130 gross m of Devonian Huamampampa and Icla sands. On test of the H-3 and Icla sands, the well flowed a combined 25 MMcfd of gas and 580 b/d of condensate through a 40/64-in. choke with 3,060 psi flowing tubing pressure. Partners in the block are: operator Total, 41%; Mobil Boliviana de Petroleos, 34%; and Tesoro Bolivia Petroleum Co., 25%. A second exploration well is planned.

Elf Petroland BV,
the Dutch oil and gas unit of Elf Aquitaine, made a natural gas discovery on Block L4a in the Dutch North Sea. The well cut Rotliegend pay at 4,036 m and flowed 31.6 MMcfd. Partners in the license area are: operator Elf, 37.11%; Energie Beheer Nederland BV, 40%; Total Oil & Gas Nederland, 18.55%; and Caparex Netherlands, 4.34%.

Clyde Petroleum Exploratie BV,
a unit of Gulf Canada Resources Ltd., Calgary, made a natural gas discovery on Block Q4 in the Dutch North Sea. On test, the Q4-9 well flowed 26 MMcfd and 28 MMcfd of gas from two separate Triassic zones, "both at export pressures," said Gulf Canada. Block Q4 partners are: operator Clyde Petroleum, 49.75%; Dyas BV, 17.25; and Clam Petroleum BV, 33%. Clam is a 50-50 joint venture of Marathon Petroleum Netherlands Ltd. and LL&E (Netherlands) Inc.

Drilling-production

Production began
from Benchamas field on Block B8/32, 125 km offshore in the Gulf of Thailand. Block partners are: Chevron Corp., 51.66%; Pogo Producing Co. unit Thaipo, 46.34%; and Palang Sophon, 2%. Initial production from the field-flowing from 48 wells and three platforms-is 2,200 b/d of oil and 35 MMcfd of natural gas. State firm Petroleum Authority of Thailand is buying the gas under contract, and the oil is being exported via a floating storage and offloading unit. The partners expect production to reach 25,000 b/d of oil and 75 MMcfd of gas by October. The block's reserves are estimated at 3 tcf of gas and more than 350 million bbl of oil.

Woodside Energy Ltd.,
operator of the North West Shelf Joint Venture, resumed production from the Cossack Pioneer floating production, storage, and offloading (FPSO) vessel positioned over the Wanaea and Cossack oil fields. Woodside reconnected the FPSO to its riser after completion of a major retrofit late last year, aimed at increasing the vessel's capacity (OGJ, Oct. 19, 1999, p. 44). Equal North West Shelf Venture partners are: Woodside, BHP Petroleum (North West Shelf) Pty. Ltd., BP Developments Australia Pty. Ltd., Chevron Asiatic Ltd., Japan Australia LNG (MIMI) Pty. Ltd., and Shell Development (Australia) Pty. Ltd.

Altomar Girassol-
a joint venture of Bouygues Offshore SA, ETPM, and Stolt Comex Seaway AS-let contract to Oceaneering International Inc. unit Oceaneering Multiflex for the production control umbilicals for Elf Exploration Angola's subsea Girassol project (OGJ, Feb. 15, 1999, p. 36). Oceaneering will provide as much as 53 miles of steel tube umbilicals and related hardware to tie 40 planned subsea wells to the control system aboard Elf's Girassol field FPSO.

U.S. Minerals Management Service
granted deepwater royalty relief to Mariner Energy Inc., Houston, for development of the Mississippi Canyon Block 718 field, in 2,710 ft of water about 125 miles southeast of New Orleans in the Gulf of Mexico. Royalties will be suspended on the first 87.5 million boe produced from the field, dubbed Pluto. MMS has granted requests for deepwater royalty relief on three other fields in the gulf since 1995.

Power

PP&L Global Inc.
(a unit of PP&L Resources Inc., Allentown, Pa.) and Duke Energy North America (DENA), Houston, signed an agreement to build a 500-MW natural gas-fired, combined-cycle power plant near Kingman, Ariz. The Griffith Energy project, with a peak capacity of 600 MW, is expected to be in service by mid-2001. PP&L and DENA will co-manage the plant's operating company, Griffith Energy LLC, which is also overseeing construction of the project.

Philippine oil firm Petron Corp.
plans to build a 345-MW, coke-fired power plant in the Philippines. The project is expected to be completed by 2003. The plant is part of several projects totaling $1 billion that Petron has planned. Among the others are the addition of a continuous-regeneration catalytic reformer and a sulfur recovery unit at its 180,000 b/d refinery at Limay, Bataan.

NGL

Enterprise Products Partners LP
acquired Kinder Morgan Energy Partners LP's 25% interest in a 210,000 b/d natural gas liquids fractionation plant at Mont Belvieu, Tex., for $45 million. Kinder Morgan said the divestment was due to the "passive" nature of its ownership of the plant and its desire to avoid the commodity risks of the NGL market.

Terminals

Fortum Corp.'s Russian unit,
Neste St. Petersburg, began delivery of refined products to its partially completed 500,000 metric ton/year import terminal at Lomonosov, Russia, on the southern coast of the Gulf of Finland. The first construction phase of the two-phase project took 18 months to complete and included a tank farm, rail and truck loading-unloading facilities, and offices. A vapor emission-control system will be installed in early 2000. The second phase of the work will include a pipeline connecting the terminal to the harbor. Total cost of the project is estimated at 180 million markka.

Pipelines

Teppco Partners LP,
Houston, plans to build a 360-mile products pipeline system from its terminal in Beaumont, Tex., to Little Rock, Ark. The line will expand its existing Midwest system by 100,000 b/d. Completion is expected in 18-24 months. The project's cost and size will be determined as details are pinned down over the next few months, said Teppco.

Lubes

BP Amoco plc
and Caltex Australia Ltd. signed a memorandum of understanding to form a joint venture to blend, package, and warehouse lubricants in Australia. The JV will comprise three blending plants, in Queensland, Western Australia, and Victoria. As a result of the combine, BP Amoco intends to close its plant in Spotswood, Victoria. The two companies reportedly do not foresee any competition concerns arising, as there are more than 30 lubricant blending and packaging plants in Australia. The JV will be called Australian Lubricants Manufacturing Co. Earlier this year, the companies halted negotiations to create an Australian refining joint venture (OGJ, Mar. 8, 1999, Newsletter).

Sun Lubricants,
a unit of Sunoco Inc., Philadelphia, will spend more than $50 million to expand its Yabucoa, P.R., base oil refinery. The expansion will include the installation of modern catalytic dewaxing technology that will be used to produce low-volatility, high-VI base oils. However, Sun will continue to make heavy, API Group II lubes and intermediate waxes by methyl ethyl ketone dewaxing.

Motiva Enterprises LLC,
a joint venture of Shell Oil Co., Texaco Inc., and Saudi Aramco, chose Chevron Corp. technology for the second phase of its Port Arthur, Tex., base oil project. The project will convert the JV's Group I base oils production to low-aromatic, high-VI Group II/III base stocks. The revamp also will increase total Group II/III base oil production at the plant to 21,900 b/d. Construction is expected to conclude in mid-2001.

Financing

InterGen
closed on the $480 million in financing needed for Sidi Krir 3 and 4, a 685-MW natural gas-fired power plant complex to be built 30 km west of Alexandria, Egypt. The complex is Egypt's first private-sector power project, said InterGen.

Courts

Seven oil and gas firms
are suing Canadian 88 Energy Corp., Calgary, in a dispute stemming from joint ownership of an Alberta natural gas plant and other facilities. The companies allege Canadian 88 caused other owners to pay compressor fees "grossly in excess of those generally being charged in the marketplace for similar services." Companies suing are Beau Canada Exploration Ltd., Murphy Oil Co. Ltd., Enermark Inc., Freehold Resources Ltd., Startech Energy Inc., Compton Petroleum Corp., and Gulf Canada Resources Ltd.

Oilsands

Suncor Energy Inc.,
Calgary, signed an agreement with Ormat Industries Ltd.'s Canadian unit, OPTI Canada Inc., to field test its bitumen upgrading technology in return for an interest in Suncor's Cheecham oilsands lease. OPTI will build a pilot plant, complete a drilling program, and evaluate the oilsands lease near Cold Lake, Alta. OPTI will pay the full cost of the pilot plant. Suncor has an option to participate in a full-scale commercial plant, and OPTI can earn a 50% interest in the Cheecham heavy oil lease by completing evaluation drilling. Construction of the pilot unit is planned in 2000, with completion slated for 2001.