INDUSTRY BRIEFS

Spills

Heavy rains in Buenos Aires caused rising floodwaters in the Rio de la Plata estuary to break through a barrier built to contain crude oil that was spilled Jan. 15 when a Royal Dutch/Shell tanker collided with a German container ship (OGJ, Jan. 25, 1999, p. 46). The rising waters-about 2 m above normal levels-allowed the spill to spread about 4 km up the Atlantic coast as well as contaminate the river banks. About 1,573 bbl of crude oil leaked from the tanker after the collision.

NGL

Several explosions on Jan. 27 at a natural gas liquids fractionation plant near Taylor, B.C., operated by Solex Gas Liquids Ltd., Calgary, created a 300-ft fireball. Three men were taken to a Fort St. John hospital; two were retained for burn treatments. Taylor's temporary evacuation of about 1,200 people in the area was fueled by fear of additional explosions at area plants and a threat of sour gas leaks. The cause of the blast is under investigation. At present, the suspected cause is a leak or accidental release of gas or liquids, while initial reports said a welding operation may have been a factor.

Companies

Houston Industries Inc., Houston, changed its name to Reliant Energy. The company's four local distribution companies were renamed Reliant Energy-HL&P, Reliant Energy-Arkla, Reliant Energy-Entex, and Reliant Energy-Minnegasco.

Ruhrgas AG
plans to increase its 2.5% stake in Russia's Gazprom after another 2.5% of the company's shares are placed up for bid by midyear. Ruhrgas gained its present holding during Gazprom's first share auction with a $660 million bid (OGJ, Dec. 28, 1998, Newsletter). Russia's government now holds 38.4% of Gazprom.

Coplex Resources NL,
Hobart, and Norwegian drilling company Northern Offshore ASA got into a dispute after Coplex sold its $50 million (Australian) semisubmersible rig, Galaxy Driller, to Northern Offshore in April 1998 and then leased it back for 3 years at $45,000/day. Coplex guaranteed the charter payments with an $8 million escrow account and a $12 million corporate guarantee. Coplex then subleased the rig to an Indonesian company that canceled its drilling program in October 1998. Northern Offshore made an application in the Supreme Court of Western Australia, alleging that Coplex defaulted on its charter. The case will be heard in February 1999.

BHP Group Resources Pty. Ltd.,
Melbourne, plans to convert its 50% working interest in the Prirazolmnoye oil field, off northern Russia, to a 5% fully paid, free carried interest. Under terms of the deal signed by BHP and its Russian partners Gazprom and Rosshelf, the Russian companies will share 100% working interest, enabling them to seek other partners and to develop the field under their own schedule. BHP will receive 5% of any future production from the field, which contains an estimated 400 million bbl of oil.

Calpine Corp.,
San Jose, acquired a 20% interest in 82 bcf of Sacramento basin gas reserves with a $15 million investment in a unit of Sheridan Energy Inc., Houston. The investment will help fund Sheridan's purchase of oil and gas properties from Amerada Hess Corp. A 10-year contract lets Calpine purchase 100% of the Sheridan unit's production, currently 20 MMcfd.

Pipelines

CMS Energy Corp. unit CMS Continental Natural Gas Inc., Dearborn, Mich., acquired the 750-mile Breckenridge crude oil gathering system in north central Texas from Koch Industries Inc. unit Koch Hydrocarbon Co., Wichita, for an undisclosed sum. CMS intends to transport natural gas through certain segments of the idle system.

Drilling-production

CACT Operators Group started up Huizhou (HZ) 32-5 oil field in the Pearl River Mouth basin off China. The first South China Sea project to use a subsea tie-back to a platform, HZ 32-5 is expected to reach flow of 27,000 b/d of oil from three wells, within 2 months (OGJ, Oct. 21,1996, p. 24). CACT, which comprises state-owned China National Offshore Oil Corp. 51% and Agip China BV, Chevron Overseas Petroleum Ltd., and Texaco China BV 16.3% each, currently produces 90,000 b/d of oil from four other fields on the Huizhou block.

Apache Corp.
and partners expect production to start up at 30 MMcfd of gas in the first quarter from Foxtrot natural gas/condensate field off Ivory Coast. Production is expected to reach at least 50 MMcfd in 2001. The first production well, Foxtrot A-1, on test gauged a flow rate of 40.6 MMcfd of gas and 600 b/d of condensate through a 1-in. choke with 2,000 psi flowing tubing pressure from Albian pay at 7,695-8,717 ft. A prospective oil column is below the gas column and will be tested later. A second well is drilling ahead. Gas flows to two power plants near Abidjan, and liquids will be shipped to a nearby refinery. Interests are operator Apache and Bouygues Group unit SECI 24% each; Enerci, a venture of Electricite de France and Gaz de France, 12%; and state-owned Petroci 40%.

Woodside Energy Ltd.,
Perth, let a $35 million (Australian) contract to Kvaerner Oil & Gas Asia Pacific, a Perth-based unit of Oslo's Kvaerner AS, to provide maintenance services on its Northern Endeavor floating production, storage, and offloading (FPSO) vessel. The FPSO is slated to begin production in Laminaria field in the Timor Sea off northwest Australia in the fourth quarter. The maintenance contract extends to August 2002. The production barge will be the world's largest newbuild FPSO, with capacity to store 1.4 million bbl of oil (OGJ, Jan. 20, 1997, p. 28).

The Apache reel pipelay vessel
arrived in Australia's Bass Strait from the North Sea to lay 23 km of production pipeline from 3 subsea wellheads in the deepwater Blackback oil field to the existing Mackerel field platform. The line will be laid across the Bass Canyon and continue over the edge of the continental shelf. Blackback is 90 km from shore in 400 m of water. Production drilling will commence this month. First oil is expected in March 1999, and peak production is expected to be about 19,000 b/d of oil. The fields are operated by a combine of Esso Australia Resources Ltd. and BHP Petroleum Pty. Ltd.

Mobil Australia Resources Co. Pty. Ltd.
was awarded production license WA-17-L over the Athena gas and condensate discovery in the Carnarvon basin off Western Australia. Interests are operator Mobil and Phillips Oil Co. Australia 50% each. The field was discovered in late 1997 on exploration permit WA-248-P and proved to be an extension of the large Perseus field found several years earlier by the Woodside Petroleum Ltd.-led North West Shelf joint venture. All parties are now discussing the most appropriate way to unitize the Perseus-Athena field and optimize its development.

Exports-imports

Imperial Oil Resources Ltd. and Boston Gas Co. filed a joint application with Canada's National Energy Board for the export of natural gas from the Sable Offshore Energy Project to Boston Gas (OGJ, Oct. 19, 1998, p. 25). The contract's term will be from Nov. 1, 1999, to Mar. 31, 2007. Over the course of the contract, about 3.3 billion cu m of gas will be transported from St. Stephen, N.B., to markets in Massachusetts.

Geothermal

Calpine plans to acquire a 75% interest in a geo- thermal steam field in the Geysers area of northern California from Unocal Corp. for $101 million. The purchase will add to Calpine's existing 25% interest in the 14,000-acre field, which fuels 12 Pacific Gas & Electric Co.-owned power plants with about 540 MW of capacity in Sonoma County, Calif.

Refining

Elf Aquitaine plans to invest 230 million francs in its Donges refinery in Brittany, France, to adapt it to meet new benzene specifications and reduce the sulfur content of diesel. Also, Elf will spend 75 million francs to install a gas-fired cogeneration plant. In addition, about 100 million francs will be spent on maintenance and installation.

India's
Reliance Petroleum Ltd. let a multi-million euro contract for to Shell Global Solutions, a unit of Royal Dutch/Shell, to provide technical advice and services at its Jamnagar refinery. The 350,000 b/d refinery is due to start up in March. Once the plant is operational, Shell will help Reliance maximize the plant's products yield, efficiency, and profitability. Shell will also advise over the duration of the long-term contract on safety, maintenance, and process optimization.

Cogeneration

China clay producer ECC International plc, St. Austell, U.K., awarded a £12 million ($20 million), 10-year contract to BP Energy Ltd. to build and operate two combined-heat-and-power plants in the U.K. BP will install 3.7 MW gas turbines at ECCI's china clay works at Par Harbour, Cornwall, and Marsh Mills, Plymouth. The Par Harbour unit will power an existing fluidized-bed china clay dryer, while the Marsh Mills unit will drive two existing dryers. The plants are due to be operational by the third quarter.

Marketing

Franchise Finance Corp. of America (FFCA), Scottsdale, Ariz., completed a $52 million sale-leaseback financing deal with Giant Industries Inc, also based in Scottsdale. FFCA purchased and leased back to Giant 83 convenience store and gasoline retail sites, all of which were recently acquired by Giant or its units.

Exploration

U.S. Minerals Management Service is considering holding a joint central and eastern Gulf of Mexico lease sale in December 2001. It would advance a planned eastern gulf sale, No. 181, to December 2001 from March 2002 and hold it simultaneously with central gulf Sale 182. MMS was polling oil companies for their interest in the eastern gulf region off Alabama and the Florida panhandle.

Murphy Oil Corp.,
El Dorado, Ark., signed three production-sharing agreements for Malaysian Blocks SK 309, SK 311, and K. Blocks SK 309 and SK 311 cover 2.4 million contiguous acres in shallow water off Sarawak. Block K covers 4.1 million acres in deep water off Sabah. Operator Murphy holds an 85% interest in Blocks SK 309 and 311 and 80% interest in Block K. The remaining interests are held by Petronas Carigali, the exploration arm of the state oil company.

Seagull Energy Corp.,
Houston, completed a discovery well in the East Cameron area in the Gulf of Mexico off Louisiana. Its East Cameron 152 No. 1 well was drilled to 9,990 ft TD and hit 43 ft of pay at 9,600-9,700 ft. On test, the well flowed 9.9 MMcfd of gas and 910 b/d of condensate through a 17/64-in. choke with flowing tubing pressure of 6,000 psi. The well's 50-50 partners, operator Seagull and Spinnaker Exploration Co. LLC, plan to put the discovery on production within the next 6 months.

Swift Energy Co.,
Houston, completed a discovery well on its 70,000 acre prospect in central Texas. On test, the Rancho Cullen No. 1-H well flowed 17.5 MMcfd of gas through a 20/64-in. choke with 8,175 psi tubing pressure. The well was drilled to 14,450 ft TVD, with a single horizontal 4,086-ft lateral. The well's interest holders include operator Swift 45.8% and Chevron USA Production Co. 50%. Both companies maintain a 50% interest in the joint development area. Production facilities and an associated 80 MMcfd pipeline are to be built by mid-February.

Australia's Northern Territory
named the successful bidders for three new offshore petroleum permits. BHP, Woodside, and Shell Development (Australia) Pty. Ltd. were awarded permit NT98-1 in the Timor Sea, near the undeveloped gas discoveries of Sunrise, Sunset, Troubadour, and Loxton Shoals. Woodside and Shell were awarded NT98-6, near the undeveloped Tern and Petrel gas fields. Brisbane-based Roma Petroleum Co. and the U.K.'s Guinness Peat plc were awarded NT98-2, also near Sunrise and Troubadour. During the next 6 years, an estimated $65 million (Australian) will be spent on the areas. Work will include drilling a total of 7 wells and the acquisition of new data from a 260 sq km 3D seismic survey plus over 3,000 km of 2D seismic work.

Premier Oil plc
unit Premier Exploration Pakistan Ltd. discovered what it described as significant natural gas reserves in Pakistan with the Zarghoon South 1 gas well, about 40 km east of Quetta. The well was drilled to 2,172 m and flowed on test at a rate of about 16.7 MMcfd. Government officials estimate the area's potential gas resource at 5 tcf.

Petrochemicals

Saudi Arabia's Eastern Petrochemical Co., a joint-venture affiliate of Saudi Basic Industries Corp., secured loans totaling $875 million to help finance expansion projects. The company is building a $1.25 billion ethylene glycol plant and debottlenecking existing linear low density polyethylene (Lldpe) plants at Al Jubail. The ethylene glycol unit is due on stream in 2000 and will have capacity of 450,000 metric tons/year. There are already two ethylene glycol units in place at the complex, with combined capacity of 900,000 tons/year. The Lldpe plants have combined capacity of 450,000 tons/year. Debottlenecking is intended to add 300,000 tons/year to Lldpe capacity, with project completion also slated for 2000.

Gas gathering

Shell Petroleum Development Co. (SPDC) let a $160 million contract to Bouygues Offshore for the gas gathering and processing facilities for the Odidi associated gas gathering project in Nigeria. The project consists of gathering and processing associated gas from five SPDC flow stations in the Niger Delta area. It involves the building of gas compression and processing facilities for collection of associated gas from Egwa 1, Odidi 1 and 2, and Batan flow stations.