INDUSTRY BRIEFS

Refining

Ventech Process Equipment Inc., Pasadena, Tex., suspended the relocation of its Calgary refinery to Russia due to Russia's current economic crisis. Ventech, which acquired the refinery from Shell Canada Products Ltd. last year, expected to have completed the move in second half 1999 (OGJ, Sept. 7, 1998, p. 42). Ventech will maintain the facility at the current site.

LNG

Enron Corp. let three contracts worth a combined $242 million to units of Kvaerner AS, Oslo, to design, procure, and build liquefied natural gas supply facilities for a power station being built by Dabhol Power Co. on India's west coast. The Enron-led Dabhol project will be India's first LNG facility. Kvaerner will provide facilities to offload, store, and regasify LNG. The plant will be built 150 km south of Mumbai and is due for completion in fourth quarter 2001.

Pipelines

China National Petroleum Corp. (CNPC) plans to build a 503-km, 660-mm natural gas pipeline from Sichuan basin in southern China to Jinzhou, Hubei province, in central China in 1999. The line, with a planned capacity to transport 3 billion cu m/year of gas, is estimated to cost 1.9 billion yuan. Completion is expected in 2000.

A consortium
comprised of Westech Energy Corp., Denver, and Qest (formerly Enerco New Zealand Ltd.), Auckland, plans to lay a $60 million gas pipeline from Frasertown, New Zealand, near Wairoa, to Napier-Hastings. Start of construction is slated for October, with a completion date set for mid-2000. In March, the partners will also drill three more appraisal wells in Kauhauroa field on PEP 38329 in the East Coast basin. The consortium plans to use most of the gas, possibly for gas-fired power generation, on the east coast.

Belgium's Distrigaz SA
and Germany's Ruhrgas AG each acquired from BG plc a 5% interest in Interconnector (U.K.) Ltd., operator of the Interconnector gas pipeline from the U.K. to Belgium. The 5% shares are valued at £5 million ($8.25 million) each. The transactions leave BG with a 25% stake. BG earlier sold a 5% interest to Snam SpA. The deals bring Distrigaz's and Ruhrgas's interests in the pipeline, and their shares in its 20 billion cu m/year capacity, to 10% each. First gas was delivered through the Interconnector in October 1998 (OGJ, Oct. 12, 1998, p. 41).

Safety

U.K. Health and Safety Executive (HSE) published the results of a study of blast injuries among building occupants caught in vapor cloud explosions. The study, performed by the Defense Evaluation and Research Agency, Porton Down, U.K., comprised a literature search and assessment of a risk model developed by W.S. Atkins Science & Technology, London. The model addresses the principal causes of fatal injury but not causes such as translational blast injury and burns. "The predictions given by the model are likely to be over-pessimistic for most scenarios of interest," said HSE, "The model should only be used where a high degree of conservatism is required."

Power

Mexico's Comisi?n Reguladora de Energ!a issued a "self-use" natural gas transportation permit to Transportadora Industrial de Gas SA (Tigsa) to supply gas to its Energ!a de R!o Colorado power plant in Mexico's Sonora state. Tigsa, a combine of Energ!a Industrial R!o Colorado and Servicio Occidental de M?xico, will lay a 2.7-km, 12.75-in. gas pipeline that will transport 70.6 MMcfd from the U.S./Mexico border to the 470-MW plant. Public Service Enterprise Group, a consortium of 31 companies that will use the electricity, will invest about $225 million in the plant's construction.

Mobil Producing Nigeria Unlimited
plans to build a 350-MW power plant at Bonny, Rivers State, Nigeria. Construction of the plant, estimated to cost $390 million, is expected to last 18 months and begin by mid-1999. The plant will increase the national power generating capacity by 15% from its current 2,470 MW.

Drilling-production

Rudgil SA, a unit of Brazil's Schahin Engenharia e Com?rcio Ltda., let contract to Friede Goldman International Inc. subsidiary Friede & Goldman Ltd., New Orleans, for the design and construction of the deepwater semisubmersible Millennium SA. The rig, scheduled for delivery early in 2001, will be capable of drilling in 5,000 ft of water and have a variable deck load of 3,500 long tons. Rudgil has a 6-year contract with Petroleo Brasileiro SA to operate the rig off Brazil.

Exxon Corp.
unit Esso Production Malaysia Inc. began production from the Tapis E oil platform in 200 ft of water 120 miles off Terengganu, Peninsular Malaysia. Production is expected to reach a peak of 25,000 b/d of oil. Esso is developing the field under a production-sharing agreement with Petronas unit Petronas Cariga* Sdn. Bhd. Under the agreement, Esso and Cariga* have respective partnership interests of 78% and 22%.

Talisman North Sea Ltd.
gained approval from the U.K. Department of Trade and Industry for its plan to develop Orion discovery on North Sea Block 30/18e. The find will be developed as a subsea satellite of Talisman's Clyde platform, 16 km away. First production is expected in fourth quarter 1999 at an initial rate of 8,000 b/d of oil and 15 MMcfd of gas. Orion reserves are estimated at 20 million boe. License partners include operator Talisman 87.5%, Summit U.K. Oil Ltd. 6.25%, and Enterprise Oil Exploration Ltd. 6.25%. Separately, Talisman's Bleo Holm production, storage, and offloading ship sailed out to Ross field, which is expected to be brought into production by the end of March.

Phillips Petroleum Co. U.K. Ltd.
began production from Renee field at a rate of 15,000 b/d of oil and 7.5 MMcfd of associated gas. U.K. North Sea Block 15/27 Renee field and nearby Block 15/28b Rubie field are being developed jointly with a subsea system tied back to the AH001 production semisubmersible operated by Amerada Hess Ltd. on the nearby Rob Roy and Ivanhoe fields. A production well is being drilled in Rubie, slated for completion in April, and a second production well is planned for Renee. Phillips expects oil production from the two fields, with estimated combined reserves of 28 million bbl of oil, to peak at 26,000 b/d.

Scimitar Hydrocarbons Corp.,
Calgary, began production at its Issaran oil field in Egypt with the reactivation of two of nine existing wells. Initial production is more than 930 b/d of oil and is expected to stabilize at 650 b/d. More wells will be reactivated and placed on stream in the next few weeks as facilities are installed. Under an agreement with Egypt's General Petroleum Co. (GPC), Scimitar will receive about 75% of revenue from crude sales and GPC 25%. Subject to completion of additional financing, Scimitar plans to drill four more wells at the field this year. Scimitar says production from Issaran is profitable at current prices.

McMoRan Exploration Co.,
New Orleans, began production from two Gulf of Mexico wells: Vermilion Block 160 No. 4 sidetrack well and Vermilion Block 159 No. 3 well. Combined gross production from the wells is about 53 MMcfd of gas and 1,760 b/d of condensate. Operator McMoRan has a 58.4% interest in the 159 No. 4 sidetrack and a 43.8% interest in 160 No. 3. Both blocks are in 100 ft of water, 42 miles off Louisiana.

Azerbaijan International Operating Co.
(AIOC) secured $200 million in loans from both the European Bank for Reconstruction & Development and International Finance Corp. to help fund the early oil project in Chirag field in the Caspian Sea off Azerbaijan. The loans will be made to AIOC consortium members BP Amoco plc, Exxon Corp., Lukoil, Turkiye Petrolleri AS, and Unocal Corp. The early oil project is the first stage in the development of Chirag, Azeri, and Gunesh* fields by the consortium (OGJ, Aug. 25, 1997, p. 42).

Petrochemicals

Malaysia's Petronas signed an agreement with South Africa's Polifin Ltd. and the Netherlands' DSM Polyethylenes BV to build a 255,000 metric ton/year low-density polyethylene plant at Kertih, Terengganu, on the northeast coast of Peninsular Malaysia. The plant is slated to come on stream during third quarter 2001. Petronas and Polifin will each hold 40% interest in the plant, while DSM will hold the remaining 20%.

Exploration

Talisman Energy Inc., Calgary, reported several major natural gas discoveries in three core operating areas in western Canada. An exploration test in the Monkman area of northeastern British Columbia flowed at a rate of 58 MMcfd. Four wells were completed in the Alberta foothills area and flowed at 7-22 MMcfd on test. A gas discovery in the Elmworth-Wapiti area of northwestern Alberta flowed at 32 MMcfd.

Petrolera Argentina San Jorge SA,
Buenos Aires, announced an oil discovery on Rio Negro Norte block in Argentina's Neuquen basin. On test, Anticlinal de Mar!a 1 flowed 1,264 b/d of 47° gravity oil from Jurassic Lajas at 9,006-9,246 ft and 1,786 b/d of 53° gravity oil from Jurassic Punta Rosada at 8,760-8,892 ft. The discovery lies within 2 miles of Loma Negra field, discovered in 1997. Its proximity to existing production facilities there will allow prompt and cost-efficient development, said San Jorge. Partners in the block are San Jorge 37.5%, YPF SA 35%, International Finance Corp. 15%, and Metro Holding 12.5%.

MOL Pakistan Oil & Gas Co. BV,
a unit of Hungary's MOL Rt., acquired from Austria's OMV AG a farmout on the Khanpur block exploration license in Pakistan, where OMV is operator. OMV unit OMV Pakistan Exploration GmbH has a 75% interest in the license, MOL 20%, and Pakistan 5%. Pakistan's stake may be increased to 25% in the event of a commercial discovery. OMV began exploration of the 7,200 sq km block in August 1997. MOL expects to pay a minimum of $900,000 to fund seismic data acquisition and geological studies on the block; exploration drilling may follow.

Gas storage

California Public Utilities Commission will review an application from Western Hub Properties unit Lodi Gas Storage LLC for the development of a natural gas storage field and the building of a natural gas pipeline that would connect it to the Pacific Gas & Electric pipeline system. The proposed project would include a water removal facility, 10 natural gas withdrawal/injection wells, a compressor and dehydration station, and a 31-mile pipeline in San Joaquin and Sacramento counties.

Companies

Nipsco Industries Inc. will acquire PacifiCorp's Houston-based natural gas marketing and storage company, TPC Corp., for $132.5 million, plus a payment for working capital to be determined on the date of closing the deal. The deal is expected to close during second quarter 1999.

Weatherford International Inc., Houston, and GE Capital, Stanford, Conn., formed a joint venture of their compression groups-Weatherford Compression and Global Compression Services Inc. Weatherford will own 64% of the new company, called Weatherford Global Compression Services, and GE Capital will own 36%. The new company will be headquartered at Irving, Tex.

PrimeWest Energy Trust,
Calgary, increased an offer for Starcor Energy Royalty Fund but will allow a bid for Orion Energy Trust to lapse. PrimeWest earlier offered $200 million (Canadian) for the two trusts, with about $95 million offered for Starcor. The company said its revised bid for Starcor is about a 23.5% premium on the original offer. A rival bidder, Arc Energy Trust, has offered $225 million for Starcor and Orion.

Exports-imports

Greece wants to double its imports of Russian natural gas through Bulgaria after 2001. Bulgaria is calling for a three-party agreement among the countries and plans to bolster the capacity of its main line to ensure the delivery of 3 billion cu m/year of gas to Greece by 2001.

Cogeneration

Exxon Chemical Olefins Inc. let contract to Jacobs Engineering Ltd. to provide engineering, procurement, and construction for work involving the steam section of the power project at Exxon's Fife ethylene plant at Mossmoran, Scotland. Jacobs will build a 15-MW condensing turbine, revamp the high pressure boiler feedwater pumps, revamp the condensate and control system, and construct a building to house the turbine. The project is scheduled to be completed by second quarter 2000.

ATCO Group,
Calgary, has commissioned a 180-MW cogeneration plant with Boral Energy Resources Ltd., Sydney, at Adelaide in South Australia. The natural gas-fired cogeneration plant-the largest cogeneration facility in Australia-will supply about 10% of the electricity requirements of South Australia.

NGV

Alternative Fuel Systems Inc., Calgary, signed an agreement with Beijing to study the feasibility of using natural gas vehicles in the city, where smog is a serious environmental problem. Beijing plans to convert its large public transit fleet and 60,000 taxis to alternate fuels over several years. The project would include establishing natural gas service stations in Beijing. Hydro Quebec, Montreal, and Kraus Group Inc., Calgary, would also be involved in the project.

Gas gathering

EuroGas Inc., New York, signed a memorandum of understanding with Erdol-Erdgas Gommern GmbH to build a gas gathering, processing, and transmission system in western Poland. The system will tie together four Polish Oil & Gas Co. (POGC) gas fields to a proposed power plant at Zielona Gora, Poland. EuroGas recently entered into a joint ownership agreement with POGC to acquire a 50% interest in the four fields (OGJ, Feb. 22, 1999, p. 30).