Pipelines
TransCanada PipeLines Ltd.,
Calgary, completed construction of a $266 million, 700-km natural gas pipeline in Mexico's Yucatan peninsula (OGJ, Mar. 8, 1999, p. 62). The 24-in. line, Energía Mayakán, will transport 370 MMcfd of gas from Ciudad Pemex, Tabasco, to power plants in Cam- peche and Yucatan. The line will also deliver gas to customers, including several power plants being converted from fuel oil to natural gas. TransCanada holds a 62.5% interest in the line, which was the first such project to be awarded to the private sector by Mexico. Other interest holders are InterGen unit Merida Pipeline Ltd., 32.5%, and Gutsa Construcciones SA de CV, 5%.
Tennessee Gas Pipeline Co.,
a unit of El Paso Energy Corp., Houston, completed construction and has started initial natural gas shipments on its 9.5-mile, 24-in. interconnect between its Donna lateral and the existing facilities of Pemex Gas y Petroquimica Basica in Reynosa, Mexico. The 216 MMcfd, bidirectional lateral is the third such line linking Tennessee Gas with Pemex Gas's system. Pemex Gas signed a 10-year firm contract for 181 MMcfd of gas on the new facilities.
US Department of Transportation's
Research and Special Programs Administration ordered Olympic Pipeline operator Equilon Pipeline Co. to reduce its maximum operating pressure 20% on its entire Washington state system. The action came after a hydrostatic test failure near Bellingham, Wash. The pipeline had ruptured June 10 (OGJ, June 21, 1999, p. 34).
Spills
An oil spill
was caused by a blast and subsequent fire on an oil pipeline-owned by Royal Dutch/Shell's Nigeria unit-in Warri state, southern Nigeria. The 24-in. line extends from Shell's Ughelli quality-control center to its Forcados terminal and carries 100,000 b/d of oil. At presstime, the cause of the blast, which reportedly destroyed 500 hectares of rubber plantation, was still under investigation; Shell had not estimated the volume of oil that was spilled. Because Shell could not rule out sabotage as a possible cause of the blast, a joint investigative team of Shell and state-owned Nigerian National Petroleum Corp. has been launched. Clean-up is under way, and Shell plans to conduct line repairs shortly.
US Department of Justice
said Anax International Agencies Inc.-operator of the tanker MT Command-is to pay more than $9.4 million in criminal and civil penalties for spilling about 71 bbl of fuel oil Sept. 27, 1998, off San Francisco. Capt. Dimitrios Georgantas also pleaded guilty. The Department of Justice said the US Coast Guard had to intercept the ship at sea, the first time that had been done on suspicion of pollution charges.
Energy supply
Enron Energy
Services,Houston, signed a $1 billion, 10-year outsourcing agreement with Owens Corning for total energy management services at 20 of Owens Corning's major manufacturing facilities in the US. The firms will jointly implement an energy-savings program designed to decrease energy consumption and lower costs for Owens Corning. Enron will supply or manage all energy commodity requirements, including electricity and natural gas; mitigate risks of price volatility; and design, build, and finance certain energy infrastructure projects.
Companies
El Paso Energy
signed an agreement with the US Federal Trade Commission to divest certain properties after the conclusion of its merger with Sonat Inc. (OGJ, Mar. 22, 1999, p. 37). Going up for sale are El Paso's wholly owned East Tennessee Natural Gas Co., Sonat's wholly owned Sea Robin Pipeline Co., and Sonat's one-third interest in Destin Pipeline Co. LLC. The three properties will be sold for a total of $500 million.
Fina Inc.,
Plano, Tex., will relocate its headquarters to Houston by midyear 2000. The relocation, says Fina, will move its employees closer to the Southeast Texas operations of parent company TotalFina SA and its merger partner Elf Aquitaine SA.
Ottawa's Competition Bureau
began hearings in Calgary on Superior Propane Inc.'s $175 million (Can.) takeover of ICG Propane Inc (OGJ, Aug. 3, 1998, p. 30). Competition Bureau wants semijudicial body Competition Tribunal to force Superior to sell IGC, which it acquired from Petro-Canada. Despite the two firms holding control of more than 70% of the Canadian propane market, Superior says it faces significant competition from other fuel sources. Competition Bureau says it must win the case in the interests of consumers because Superior has enough of the market to raise prices or reduce service. Superior says the merger is in the best interests of market efficiency and will save about $40 million/year. For now, Superior is operating IGC as a separate company while it awaits a tribunal ruling, which is not expected until first quarter 2000.
Enterprise Products Partners LP,
Houston, acquired Tejas Natural Gas Liquids LLC from Shell Oil Co. unit Tejas Energy LLC for 14.5 million convertible special partnership Enterprise units and $166 million in cash (OGJ, Aug. 9, 1999, p. 27). Over the next 2 years, Tejas could earn an additional 6 million convertible contingency units. Enterprise also has entered into a long-term natural gas processing agreement with Shell for its Gulf of Mexico production.
Koch Exploration Canada Ltd.
will sell its conventional heavy oil assets in the Cold Lake region of Alberta and focus on an oilsands project near Fort McMurray in northern Alberta. Koch will sell three processing plants, with capacity of 10,500 b/d of crude, and 805,535 acres of leases. Koch Exploration Canada, a unit of Koch Oil Co., Wichita, will expand activity at its Fort Hills oilsands project 56 miles north of Fort McMurray.
Petrochemicals
BP Amoco PLC
announced an agreement for the sale and marketing of ethyl acetate in North America with Solutia, St. Louis-the former applied-chemistry business of Monsanto Co. BP Amoco will market Solutia's production in the region along with its own imports. Solutia can produce as much as 14,000 tonnes/year of ethyl acetate at a plant in Springfield, Mass., and up to 11,000 tonnes/year in Trenton, Mich. BP Amoco is building a 220,000 tonne/year capacity ethyl acetate plant in Hull, UK, for completion in 2001. This will replace existing plants in Hull and Porto Maghera, Italy, with combined capacity of 200,000 tonnes/year.
Exploration
Agip Yemen BV,
a unit of Italy's ENI SPA, agreed to transfer a 40% interest in the Gardan Block 3 permit in South Yemen to Algerian state oil firm Sonatrach. The agreement will afford Sonatrach the opportunity to participate in exploration activities outside Algeria, said Agip, and is part of a "broader project" between the two firms; two production-sharing contracts for two Algerian blocks were signed by the companies this year (OGJ, June 7, 1999, p. 34).
Petroleum Geo-Services ASA
(PGS), Houston, completed two high-technology seismic surveys in the North Atlantic for BP Amoco. PGS seismic vessel Ramform Vanguard completed a 375 sq km 4D streamer survey over BP Amoco's Schiehallion, Loyal, and Foinaven fields, west of the Shetland Islands. Also, PGS Atlantic Explorer completed a 810 sq km 3D streamer survey, with 4D potential, over BP Amoco's producing Ula and Gyda fields in the Norwegian North Sea. PGS says the data will be compared with prior data to detect the migration of reservoir fluids during production.
Indonesian state oil firm Pertamina
awarded oil and gas exploration and development contracts covering four blocks in Indonesia. The blocks, which cover a combined area of 22,274 sq km, were awarded to Japan's Apex (Yapen) Ltd., US-based PT Petromer Bengara Energi, UK-based Lasmo Krueng Mane Ltd., and the Netherlands' Ambalat Shell BV. Pertamina will receive 85% of oil production, 75% of gas production. Companies, blocks, and pledged 10-year investment amounts are: Apex, Yapen Block in Irian Jaya, $18 million; Petromer, Bengara Block in Irian Jaya, $22.4 million; Lasmo, Krueng Mane Block in northern Sumatra, $39.1 million; and Shell, Ambalat Block in East Kalimantan, $16.5 million.
Yemeni Oil Ministry
signed a memorandum of understanding with UAE's Al Otaiba Oil Co. and Australia's Oil Search NL to explore for oil in Sector 15 in Al Mukalla in the Persian Gulf off Hadramaout, Yemen. The firms are expected to complete and sign a production-sharing agreement within the next 3 months. During the first phase of development, the two firms are expected to invest $10 million on seismic surveys and the drilling of two exploratory wells.
Emerald Energy PLC,
Epson, UK, revised the reserves estimate for the Matambo association contract area in Colombia's Upper Magdalena Valley (OGJ, Sept. 13, 1999, p. 107). Based on pressure and production data gathered from the Gigante 1A discovery well, consulting engineer Blackwatch Petroleum Services Ltd. reported that the single well was in contact with 35-50 million bbl of oil in a drainage area of 2.6 sq km. Assuming uniform reservoir characteristics within the Tetuan formation, Emerald says, the estimates indicate 400-580 million bbl of oil in place.
Oil shale
Suncor Energy Australia Pty. Ltd.
produced 3,000 bbl of raw synthetic crude oil in two test runs, which lasted 30 hr, at its Stuart oil shale project near Gladstone, Queensland. Suncor and its Australian partners, Central Pacific Minerals NL and Southern Pacific Petroleum NL, expect to have consistent production from their Stage 1 demonstration plant at the deposit before yearend (OGJ, May 10, 1999, p. 36). The plant is still undergoing its commissioning stage since being handed over by contractor Bechtel in June. The plant uses the Alberta-Taciuk rotating-kiln pro- cess adapted from the Canadian oilsands industry.
Cogeneration
Mexico's Energy Regulatory Commission
issued a private cogeneration permit to Cía. de Nitrógeno de Cantarell to build a 306-Mw cogeneration power plant in Campeche state, Mexico. Investment in the project will total more than $95 million. Development partners include BOC Holdings, Marubeni Corp., Westcoast Energy Inc., ICA Fluor Daniel, and Linde AG. The station will comprise a gas turbine with a heat-recovery steam generator to generate power for what has been billed as the world's largest nitrogen plant, which will supply nitrogen for a major enhanced recovery project in the Cantarell offshore producing area operated by Petroleos Mexicanos (OGJ, Sept. 7, 1999, p. 30). Power output will be 2,000 Gw-hr/year; the power station will consume 25 bcf/year of natural gas. The power plant is expected to be in operation by May 2000.
Drilling-production
Canadian producers
replaced 146% of crude oil production and 76% of gas production in 1998 despite low prices, reported the Canadian Association of Petroleum Producers (CAPP). Declines in conventional oil and gas reserves were more than compensated for by increases in oilsands reserves, CAPP said. Conventional oil reserves at yearend 1998 fell by 1.1% to 4.9 billion bbl. Natural gas reserves fell by 3.4% to 62 tcf. Oilsands operators Suncor Energy Inc. and Syncrude Canada Ltd. added 501 million bbl to reserves and spent $880 million (Can.) on expansion projects. CAPP noted that reserve replacement was strong in 1998 despite low commodity prices and a 40% decline in drilling activity.
Wintershall Noordzee BV
mobilized the Transocean Nordic jack up to Block A6/B4 off Germany. The operator plans to drill two development wells in a gas find there, each about 3,800 m TMD with a horizontal section of 1,000 m. The jack up will be positioned for drilling alongside a jacket installed in July in 48 m of water. A 2,700-ton topsides will be installed on the jacket once development drilling is completed. Wintershall anticipates production of 3.3 million cu m/day of gas from the field, with exports going via a pipeline link to the NOGAT trunkline in the Dutch North Sea.
Refining
Bidding round results
for revamps of two of Mexico's refineries-in Tula and Salamanca-were postponed until Oct. 18, Pemex said Sept. 27. The bidding was to be completed by Sept. 28, but because Pemex had received an unexpected number of offers-six for Salamanca and seven for Tula-the firm said a decision would take longer than expected. The revamps are part of a long-term Pemex project to boost the ability of its refineries to process Maya heavy crude by an additional 647,000 b/d and to produce more high-octane gasoline and diesel fuel.
Conoco Ltd.,
the UK refining and marketing arm of Conoco Inc., plans to invest $145 million to build two desulfurization units at its Humber refinery at South Killingholme, UK, for the production of ultralow sulfur gasoline and diesel. Construction of the additional units would come ahead of new European Union fuel specifications intended to improve air quality. Construction on the $55 million gasoline unit is under way; it is due on stream in January 2000. Design and engineering of the $90 million diesel unit has begun; construction is to begin in March 2000, with start-up planned for summer 2001.
Geothermal
Calpine Corp.,
San Jose, Calif., plans to acquire the 80-Mw Calistoga geothermal power plant from Florida Power & Light unit FPL Energy and Caithness Corp., New York, for $78 million. The plant, in the Geysers region of northern California, provides electric power to Pacific Gas & Electric Co. under a long-term power sales contract.
