INDUSTRY BRIEFS

Corrections

The cancellation of a drilling contract by a unit of Apache Corp. was incorrectly reported as being related to low oil prices (OGJ, Feb. 1, 1999, p. 30). Apache canceled the contract for drilling in the Gulf of Suez in late 1997 due to government restrictions on drilling in a shipping lane. An Apache official said the government reimbursed the firm for its expenditures.

Venezuela's President-elect
Hugo Ch vez's unsuccessful coup d'etat in 1992 was against President Carlos Andres Perez, not President Rafael Caldera, as reported incorrectly (OGJ, Dec. 21, 1998, p. 33).

Courts

A Superior Court judge ordered Vintage Petroleum Co., Tulsa, to pay damages of nearly $6.7 million for the deaths of three workers and injuries to two others, stemming from an August 1994 hydrogen sulfide leak in Rincon oil field near Ventura, Calif. (OGJ, Aug. 22, 1994, p. 22). The judge found Vintage responsible for wrongly assuming there would be no gases or pressure from a well being converted to waste disposal (OGJ, Aug. 31, 1998, p. 30).

Cogeneration

Taiwan Cogeneration Corp. (TCC) let a $13 million contract to Foster Wheeler International Inc. unit Foster Wheeler Energia Oy for the design and manufacture of a 138-MW circulating fluidized-bed boiler for TCC's proposed cogeneration power plant at Taipei. The boiler will burn primarily coal but also sludge and crushed tires. Completion of the boiler is slated for yearend 2000.

A Turkish consortium
signed an agreement with the privately held Energy Transportation Group Inc. (ETG), New York, to build a 60-MW, natural-gas fired combined-cycle cogeneration power plant at Izmit, Turkey. U.S. Trade and Development Agency also granted ETG approval to conduct a feasibility study that would examine the possible expansion of the proposed plant to as much as 300 MW.

Geothermal

Caithness Energy LLC, New York, acquired Omaha-based CalEnergy Co. Inc.'s minority ownership interest in the Coso geothermal power projects in the Mojave Desert at China Lake, Calif., for $205 million in cash and $5 million in contingent payments and the assumption of a CalEnergy affiliate's share of the project's debt of $67 million.

Futures

International Petroleum Exchange, London, reported a 400% increase in trading volume for its natural gas futures contract in 1998, to 326,940 lots traded. The contract's open interest set a 1-day record of 31,075 lots on Jan. 11, 1999. Average volumes traded by yearend 1998 on the contract, launched in January 1997, topped 2,000 lots/day, compared with an average 350 lots/day in 1997.

Companies

Texas Utilities Co. unit Texas Utilities Australia Pty. Ltd. acquired the Westar natural gas distribution unit and its affiliated Kinetik Energy retail gas business from Australia's Victorian government for $1.617 billion (Australian). Westar and Kinetik are the first of Victoria's three gas utilities to be sold this year. The sale of the remaining two distribution/retail utilities, Multinet Gas/Ikon Energy and Stratus Networks/Energy 21, is expected to take place before the end of May, potentially raising more than $3 billion for the state.

Rising Star Energy LLC,
Dallas, acquired 780 producing wells in 18 fields in West Texas and eastern New Mexico from Altura Energy Ltd., Houston, for $69 million. Total proven reserves of the assets are estimated at 15.8 million boe, of which half is gas and half is oil.

Exploration

Amerada Hess Corp., Odebrecht SA, and British Borneo do Brasil Ltdo. signed a joint oil exploration and production contract with Brazil's state-owned Petroleo Brasileiro SA for Block BS-2, in the northern Santos basin, and Block BC-8, in the Campos basin, both off Brazil. The exploration phase on Block BS-2 will include a $41 million investment for 2,300 sq km of 3D seismic surveys and drilling at least two exploratory wells. Work on Block BC-8 will include a $31 million investment for 1,700 sq km of 3D seismic and drilling at least one exploratory well.

Pakistan
awarded an exploration license to Premier Exploration Pakistan Ltd. and state-owned Government Holdings for Block No. 2762-2 (Khairpur Nathan Shah) in Sindh province. The block covers 1,364 sq km in Dadu district and is next to BHP's Zamzama gas discovery, in which Premier has a 25% working interest. The 3-year minimum work program will include geological and geophysical studies during the first year, followed by a seismic survey of at least 155 line-km in the second year and the drilling of an exploration well. The joint venture is obliged to spend at least $6.7 million during the initial 3-year term.

Refining

Nigerian Pipeline & Products Marketing Co. resumed shipping crude oil from Warri to the 110,000 b/d refinery at Kaduna, Nigeria. Kaduna Refinery & Petrochemical Co.'s refinery restarted operations after a revamp by France's Total under a $214 million contract. The plant had been idle for 3 years (OGJ, May 25, 1998, p. 28).

Turkey's Akmaya Co.
acquired Petromidia SA's 106,000 b/d Constanta, Romania, refinery. Akmaya bought a controlling interest in the company for $239 million and agreed to pay the Romanian state refiner's $260 million debt over a 15-year period. In addition, Akmaya agreed to invest a further $226 million in the refinery over a 5-year term. The purchase grants Akmaya entry into Romania's downstream sector alongside state-owned Petrom and Russia's Lukoil.

Elf Antar France
let a $30 million contract to Foster Wheeler unit Foster Wheeler France SA for the revamp of a hydrodesulfurization unit and the construction of a sour water stripper unit at its refinery at Donges, France. The project will enable Elf to comply with new European Community requirements calling for steep cuts in the sulfur content of diesel fuel and gasoline. The work, scheduled to be completed by November 1999, will increase the hydrodesulfurization plant's treating capacity by 20%.

Pipelines

The $2 billion Bolivia-Brazil natural gas pipeline started operations, with initial exports of 280 MMcfd of Bolivian gas to southern Brazil (OGJ, Feb. 8, 1998, p. 36).

TransCanada PipeLines Ltd.
unit Nova Gas Transmission Ltd., Calgary, returned to service three of the four pipelines in the area of a line break that occurred 29 km north of Highway 11 and 80 km southwest of Drayton Valley, Alta. The break occurred on the fourth, 42-in. line. At presstime, the extent of damage to the line was still being assessed. Due to the break, gas receipts have been reduced by 10%, or 500 MMcfd. There were no injuries reported, and the cause of the line break remains under investigation.

Southern Cross Pipelines Australia
will acquire Normandy Pipelines Ltd.'s 25.49% interest in Goldfields Gas Transmission pipeline in Western Australia for $147 million (Australian). Southern Cross now holds 88.16% interest in the Goldfields line after purchasing a 62.67% interest in December 1998. Partners in the Southern Cross consortium are CMS Energy Corp., Dearborn, Mich., 45%; Australia Gas Light Co., Sydney, 45%; and Transalta Corp., Calgary, 10%.

EOTT Energy Partners LP,
Houston, agreed to buy crude oil transportation and storage assets from Texas-New Mexico Pipe Line Co., Houston, for $35 million. The deal, expected to close Apr. 1, 1999, includes about 2,000 miles of common carrier crude oil pipeline in the Permian basin in southeast New Mexico and in west Texas.

Canada's National Energy Board
proposed a revision of its current onshore pipeline regulations (OPR). The board requests industry comments, especially those concerning Canadian oil and gas pipeline stress corrosion cracking, safety and environmental issues, and the revision of technical standards. Comments on the OPR guidelines are due to NEB Feb. 19, 1999.

Drilling-production

Chevron U.S.A. Production Co. and its Genesis project partners, Exxon Co. U.S.A. and PetroFina Delaware Inc., announced first oil at the deepwater oil and natural gas drilling and production facility in the Gulf of Mexico (OGJ, May 4, 1998, p. 76). In 1999, Genesis is expected to produce about 30,000 b/d of oil and about 20 MMscfd of gas.

Chevron U.S.A. Production Co.,
New Orleans, and BHP Petroleum (Americas) Inc., Houston, reported a successful appraisal well on the Typhoon deepwater prospect. Green Canyon 237 No. 1 cut 310 net ft of oil pay over several horizons. The well, in 2,000 ft of water 100 miles off Louisiana, follows the project's first exploration well, on Green Canyon 236 block. Green Canyon 237 No. 2, a second appraisal well, is in progress. Chevron and BHP are 50-50 partners in the Typhoon project.

Norsk Hydro AS
let contract for an undisclosed sum to AMEC Process & Energy, a unit of London's AMEC plc, for a carbon dioxide systems study for the proposed Grane field development off Norway. Grane lies in 129 m of water on Norwegian North Sea Blocks 25/8 and 25/11 and has estimated reserves of 600 million bbl of highly viscous crude oil. Hydro is considering powering Grane's offshore production facilities from an onshore power plant by means of a 170-km, 100 MW subsea cable and injecting CO₂ produced at the power plant into the field to boost oil recovery.

Azerbaijan International Oil Co.,
the consortium developing Chirag, Azeri, and Gunesh* fields in the Caspian Sea off Azerbaijan, let contract to AMEC Process & Energy for a water injection system. The Chirag 1 platform, designed for production of 115,000 b/d, was brought into production in late 1997 (OGJ, Aug. 25, 1997, p. 42). AMEC is to engineer, procure, and build a 178,000 b/d water injection system designed to maintain oil output from Chirag 1.

Saibos CML,
a joint venture of Bouygues Offshore and Saipem SpA, let contract to Samsung Heavy Industries Co., Seoul, for the construction of a $150 million dynamically positioned field development vessel (OGJ, Nov. 2, 1998, p. 62). Delivery is slated for third quarter 2000. Among other projects, the vessel will be first used in installation of flowlines and umbilicals as part of the deepwater Girassol oil field development off Angola under a $410 million contract that operator Elf Exploration Angola let to Altomar Girassol, a joint venture of Bouygues Offshore, ETPM, and Stolt Comex Seaway.

Total
brought on stream Argentina's first subsea horizontal well on the Cuenca Marina Austral permit 24 km off Tierra del Fuego. The well's initial production is about 12,600 b/d of oil. The well is in 75 m of water and has a total measured depth of 2,915 m, which includes a horizontal section of 1,080 m. Partners in the permit include operator Total 37.5%, Wintershall AG 37.5%, and Pan American Energy Corp. 25%.

Training

Alberta signed a 5-year agreement with China National Petroleum Corp. (CNPC) for expansion of operations at a training center in Beijing. The agreement calls for expanded training in management and environmental technology at the center. It was built in 1989 under an agreement between Alberta and CNPC and generates about $30 million (Canadian)/year in revenues for Alberta firms. The name of the center will be changed to CNPC-Alberta Petroleum Center.

Environment

A U.S. District Court judge in Lafayette, La., ordered Intracoastal Liquid Mud Inc. to pay a $240,000 fine and implement an environmental compliance program. It pleaded guilty to violating the Clean Water Act by discharging wastewater into the Vermilion River in Louisiana without a permit during 1992 through January 1998. The water discharges contained oil-based drilling mud, calcium chloride, barite, and cement.

Energy marketing

Coral Energy LP, Houston, and Western Farmers Electric Cooperative (WFEC), Anadarko, Okla., signed an agreement to jointly market power generated by WFEC to the Southwest Power Pool and surrounding areas. The partners will sell power generated in excess of WFEC's existing cooperative member company consumption. Although the terms of the agreement were not disclosed, the partners have already completed several market transactions.

Gas distribution

Sempra Energy Utility Ventures unit Sempra Atlantic Gas, Halifax, N.S., estimated its gas system will cost $1.1 billion (Canadian) to build and consist of about 6,670 km of medium-pressure plastic main, about 1,400 km of high-pressure steel main, 11 tap stations, and 150 pressure-limiting stations. Sempra plans to serve more than 75% of the households in Nova Scotia within the next 7 years.

Petrochemicals

Saudi Basic Industries Corp. (Sabic) developed a process to purify the CO₂ generated as a by-product of ethylene glycol production at Al Jubail, Saudi Arabia, by its Eastern Petrochemical Co. affiliate. Sabic installed a pilot plant at the Al Jubail complex in early 1998 and has since tested it to prove process stability, identify catalysts, and optimize performance. Sabic said the new CO₂ purification process for ethylene glycol plants would serve the double purpose of reducing emissions and providing feedstock for producing methanol and urea.