Gas distribution
Mexico's Energy Regulatory Commission
awarded Gaz de France (GDF) the concession to distribute natural gas in the Puebla-Tlaxcala distribution zone, which covers 51 municipalities in the states of Puebla and Tlaxcala. Over the next 5 years, GDF is to invest $34.81 million on developing the concession. GDF won the contract with a bid of an average tariff of $0.4086/gigacalorie and coverage of 68,196 clients by the fifth year of operations. Within 5 years, GDF plans to lay 800 km of pipeline in the zone and distribute 91.8 MMcfd.
Petrochemicals
Taiwan's Dairen Chemical Corp.
is to build a 30,000 tonne/year ethylene vinyl acetate (EVA) plant in southern Malaysia. The plant is scheduled for completion in 2002. Dairen's ethylene feed will come from China General Plastics Co. Ltd. unit Titan, which has a plant in the same area. Dairen, an affiliate of the Chang Chun Petrochemical Group, produces 64,000 tonnes/year of EVA, 120,000 tonnes/ year of vinyl acetate monomer, and 30,000 tonnes/ year of ethyl acetate at its plants in Taiwan.
Refining
Iran
plans to build a refinery and petrochemical complex on Qeshm Island. The $1.8 billion project-$1 billion of which is slated for refinery construction-is expected to come on stream by yearend 2003. A consortium of unnamed foreign investors and Iranian partners, in a 70-30 respective partnership, will make an initial project expenditure of $100 million. Before full start-up, a number of small modules will go on stream to produce 120,000 b/d of jet fuel, gas oil, and other products.
Raffineria di Milazzo SPA,
a joint venture of Agip Petroli SPA and Kuwait Petroleum Corp., let two lump-sum turnkey contracts worth a combined 38 million euros to Technip SA, Paris, for a revamp of its Sicily refinery. One contract is for a sulfur-removal project-which will include construction of a 6,800 tonne/day gas oil hydrodesulfurization unit-along with a revamp of the amine unit and an upgrade of the refinery's distributed control system. The other project involves a revamp of the existing vacuum distillation unit to reduce sulfur dioxide emissions. Work is slated for completion in spring 2001.
Shell Canada Products Ltd.,
said tests showed air quality returned to normal Mar. 17 after a brief incident a day earlier at its Sarnia, Ont., refinery. Shell said low levels of hydrogen sulfide and mercaptans were released into the air. It told area residents that there would likely be no lasting or delayed health effects from the brief exposure to low levels of the substances.
Russian oil giant Lukoil
plans to resume supplies of Russian crude to the Odessa, Ukraine, refinery this month. The announcement came just days after the Ukraine State Property Fund threatened legal action, saying Lukoil had broken investment commitments by refusing to import oil. Lukoil spokesman Dmitry Dolgov said that, previously, Lukoil was forced to comply with a Russian government order suspending crude oil supplies to Ukraine. Dolgov also said Lukoil had been at a competitive disadvantage to several Ukrainian joint ventures that until recently enjoyed tax breaks on crude oil imported into Ukraine. Ukraine's Parliament revoked the law last month.
The World Bank
will lend 49.5 million euros to Bulgaria over 3 years to support environmental policy and bring Bulgarian legislation in conformity with European Union directives. The loan will support cleanup of environmental damage caused by already privatized industrial plants. Among the first three entities to receive $25 million in rehabilitation funds is the Burgas-based oil refiner Neftochim. Funds will come from the loan and from government contributions. The three-tranche environment and privatization support loan has a 20-year repayment period with a 5-year grace period.
Gas supply
PetroChina,
a subsidiary of China National Petroleum Corp. (CNPC), and Shell Exploration China Ltd. signed a letter of intent to jointly study the natural gas transmission project and related market development for Changbei gas field in China's Shaanxi and Inner Mongolia provinces. The agreement builds on the petroleum contract signed in September between CNPC and Shell to jointly explore and develop gas resources in China's Ordos basin (OGJ, Oct. 4, 1999, p. 32). The project is expected to deliver 3 billion cu m/year of gas for 20 years to eastern China. Production start-up is slated for 2004, and ultimate capital outlays could reach $3 billion.
Exploration
Remington Oil & Gas Corp.,
Dallas, and Magnum Hunter Resources Inc., Irving, Tex., made an oil and natural gas discovery on East Cameron Block 344 in the shallow-water shelf area of the Gulf of Mexico. The discovery well, drilled to 13,847 ft TD, gauged "significant shows" of oil and gas in two intervals at 12,000-12,400 ft. About 73 ft of oil and gas pay was logged. Operator Remington holds a 50% working interest in the well and Magnum Hunter a 25% working interest in the well and associated lease block.
Premier Oil PLC,
London, made a gas discovery with its Naga 1 exploration well on Natuna Sea Block A off Indonesia. Naga 1 was drilled to 8,250 ft and found substantial gas columns in eight Arang sands close to the Pelikan and Gajah Puteri discoveries. Gas from this discovery is not dedicated to the existing West Natuna gas sales agreement, and discussions for the sale of this gas and for any future gas is under way. The rig is being moved to its next location to drill the Iguana prospect, a structure similar to Naga 1's.
Ranger Oil Co.,
Houston, and partners made another natural gas discovery on North Padre Island Block 883 in Texas state waters of the Gulf of Mexico (OGJ, Feb. 21, 2000, p. 81). The find is in 80 ft of water 40 miles south-southwest of Corpus Christi, Tex. The NPI 883 No. 2 well was drilled to 13,490 ft TD and cut four productive Frio sands. Production from this and an earlier well, NPI 883 No. 1, is expected to start up by Oct. 1. Working interests in the well are held by operator Ranger, 35%; Spinnaker Exploration Co., Houston, 35%; and Houston Exploration Co., Houston, 30%.
Retail marketing
A consortium of
Chevron Corp., WalMart subsidiary McLane Co., and Oracle Corp. intends to create independent company RetailersMarketXchange.com, which will offer the first internet trade exchange designed as a full-service marketplace for convenience stores and small business retailers and their suppliers, the group says. All three firms will hold equal equity interests in the newly formed company, which intends to launch its exchange this summer.
Terminals
Shell UK Exploration & Production
and ExxonMobil Corp. unit Esso Exploration & Production UK Ltd. let an engineering design contract to Parsons Energy & Chemicals to develop preliminary plans for new inlet, receiving, and separation facilities at the St. Fergus gas terminal in northeastern Scotland. The studies will focus on a possible development of condensate from the southern Halibut basin area of the outer Moray Firth.
Drilling-production
Koch Petroleum Canada LP,
Calgary, signed a 20-year production-sharing contract with Suriname state oil company Staatsolie. The partners intend to focus on heavy oil on 140,000 acres in the Wayombo area of Suriname. A Koch affiliate intends to conduct seismic surveys starting in third quarter 2000. The firms expect to drill 15-20 test wells during the first year.
Global Marine Inc.,
Houston, took delivery of the Glomar C.R. Luigs ultradeepwater drillship. The vessel is under contract for 36 months and is rated to drill a 35,000-ft well in up to 12,000 ft of water. The vessel is initially outfitted for drilling in 9,000 ft of water and will spud its first well in mid-April for BHP Petroleum Pty. Ltd. in the Gulf of Mexico.
Kerr-McGee Oil & Gas Corp.
greenlighted development of two Gulf of Mexico fields-Boomvang and Nansen-in 3,700 ft of water. Following partner approval, the fields will be developed with two independent spars with a combined capacity of 40,000 b/d of oil and 200 MMcfd of gas. Boomvang interest holders include operator Kerr-McGee (30%), R&B Falcon Corp. unit Reading & Bates Development Co. (50%), and Ocean Energy Inc. (20%). Nansen interests are held equally by operator Kerr-McGee and Ocean Energy.
Kerr-McGee
and Ocean Energy drilled a successful appraisal well, Nansen 4, on East Breaks Block (602) in the Gulf of Mexico. The well, drilled to 15,410 ft, cut about 200 ft of net oil and gas pay. The well is in about 3,700 ft of water and has extended the reservoir found by the discovery well, which is more than 2 miles northeast of the appraisal.
Crestar Energy Ltd.,
Calgary, is using chemicals to control its Little Bow 2-27-14-18 W4M wild well, which blew out Mar. 12 near Enchant, Alta., about 110 miles southeast of Calgary. The well blew out after drillers hit a pocket of high-pressure sour gas. Crestar initially ignited the well to prevent the release of hydrogen sulfide and was injecting potassium chloride from an adjacent well in an attempt to control it. It is also drilling a relief well to inject fluids and mud if needed. At presstime, families evacuated from the area had returned home. The Alberta Energy Utilities Board said the area has been declared safe.
PTT Exploration & Production PLC
(PTTEP), a unit of Petroleum Authority of Thailand, completed drilling and testing of a fourth appraisal well on Block 15A in the Gulf of Thailand. The well was one of seven drilled to assess the hydrocarbon potential of Arthit field (OGJ, Dec. 20, 1999, p. 38). On test, Arthit-15-3X flowed 63.4 MMcfd of gas and 654 b/d of condensate from 22 gas-bearing zones with a combined thickness of 94 m. Three additional wells planned on the block are to be completed by mid-2000.
Pipelines
Northern Border Pipeline Co.
received US Federal Energy Regulatory Commission approval for a $94.4 million, 544 MMcfd natural gas extension project that will provide Northern Border shippers with access to Northern Indiana Public Service Co.'s service area. Northern Border will install 34 miles of 30-in. pipe starting from its 36-in. pipeline near Manhattan, Ill., to a point near North Hayden, Ind. The project adds to Northern Border's existing 1,214-mile interstate pipeline system, which transports about 23% of all Canadian gas imported into the US (OGJ, Dec. 28, 1998, p. 30).
Companies
BG Group PLC
is to pursue a demerger that will separate key businesses Transco and BG International. Both companies are to be managed separately with different boards and management arrangements, BG said: "In their different fields of activity, both Transco and BG International face exceptional opportunities, which will need to be pursued in conjunction with continuing rapid change and the sustained achievement of superior performance."
Petro-Canada,
Calgary, traded its remaining oil production in Western Canada with Husky Oil Operations Ltd., Calgary, in exchange for East Coast offshore interests in a cashless transaction. Petro-Canada's interests in Terra Nova oil field off Newfoundland-now under development-will be increased to 34% from 29%; its interests in White Rose field in the same area will increase to 27.5% from 17.5%. In exchange, Husky will receive interests in the Valhalla and Wapiti properties in northwestern Alberta with 10,000 boe/d of production. Terra Nova holds an estimated 450 million bbl of oil reserves and is expected to begin production in first quarter 2001, while White Rose holds reserves of 250 million bbl of oil and 2 tcf of natural gas. Husky retains a 72.5% interest in White Rose and 12.5% in Terra Nova.
BP Amoco PLC
and Shell E&P International purchased a 25% interest in the Inam license off Azerbaijan for about $36 million. The Inam prospect lies in the Caspian Sea in 30-100 m of water. To date, about 538 sq km of 3D seismic data have been acquired, and preparations are under way for drilling the first well, which will spud in the third quarter. Shell's share of exploration costs are estimated at $30-50 million. Partners in the Inam concession include operator BP Amoco (25%), Azerbaijan state oil firm SOCAR (50%), and Shell (25%).
Environment
Findland's Fortum Oil & Gas Oy
launched a voluntary program, called Climate Initiative, to reduce carbon dioxide emissions from its energy operations. Fortum's initiative, which is based on increasing the use of both renewable and low-carbon-content raw materials, is expected to reduce the firm's CO2 emissions by 300,000-500,000 tonnes/year by 2005.
Financing
FGP Corp.,
a joint venture of BG International and First Philippine Holdings Corp., concluded financing for the $500 million San Lorenzo gas-fired power project at Batangas, Luzon, the Philippines. Financing was arranged by Kreditanstalt f