Petrochemicals
An explosion and fire
Mar. 27 at Phillips Petroleum Co.'s K-Resin styrene-butadiene copolymer (SBC) plant at its Houston Chemical Complex (HCC) near Pasadena, Tex., killed one worker and injured 71 others. Of those injured, 32 were company employees and 39 were under contract, Phillips said. HCC-with production capacity of 370 million lb/year of K-Resin SBC-was shut down until a review of the complex could be completed by the US Occupational Safety and Health Administration. Following the review, both polyethylene and polypropylene production will restart.
Pipelines
PetroChina Co. Ltd.
is to begin construction this month of a 953-km natural gas pipeline in northwestern China from the Sebei area gas fields in Qinghai province to Qinghai's capital, Xining, and Lanzhou, the capital of Gansu province. The line will transport 3-5 billion cu m/year (bcm/y) of gas, 1.7 bcm/y of which will be used in Xining and 2.8 bcm/y in Gansu. PetroChina plans to spend 600 million yuan on gas development and production this year in the Sebei area, where it pegs gas reserves at 500 bcm. The Sebei fields are in the eastern Qaidam basin, where PetroChina estimates gas reserves at 900 bcm and plans to produce 5 bcm/y of gas by 2005.
An explosion and fire
killed 50 people who were tapping a products pipeline to steal gasoline in southeastern Nigeria. Firefighters were unable to contain the fire, and the immediate cause of the blast was still unknown at presstime. Police arrested 28 people on charges of vandalism.
LPG
The Cuenca Marine Austral-1
consortium (CMA-1) reported first shipments of LPG Mar. 7 from the newly completed gas processing plant at Tierra del Fuego, Argentina, via pipeline to Chilean state firm ENAP's Cabo Negro, Chile, fractionation plant. From there, LPG will enter the world trade to Japan, Australia, and the Atlantic basin, particularly Brazil. Total LPG output will be 140,000 tonnes/year of C3, 110,000 tonnes/year of C4, and 60,000 tonnes/year of C5+, the latter to be blended in Argentina with crude oil produced from Hidra field. Consortium partners are Total Austral SA (37.5%), Wintershall Energía (37.5%), and Pan American Energy (25%).
Drilling-production
Forcenergy Inc.,
Miami, reported a blowout during completion operations on a natural gas exploratory well on West Cameron Block 317, about 65 miles south of Lakes Charles, La., in the Gulf of Mexico. All personnel were safely evacuated from the Marine Drilling Rig No. 4. The blowout did not ignite and is flowing dry gas with no liquids. At presstime, well control specialists were en route to undertake well-control measures.
Crestar Energy Ltd.,
Calgary, successfully capped its Little Bow 2-27-14-18 W4M wild well, which blew out Mar. 12 near Enchant, Alta. (OGJ, Mar. 27, 2000, p. 43). It was capped Mar. 26 when 2,500 bbl of weighted water was introduced from a primary relief well, and new blowout preventers were installed to maintain control. Crestar made numerous earlier attempts to control the well, including setting it afire to prevent the release of hydrogen sulfide.
Husky Oil Operations Ltd.,
Calgary, and joint owner Petro-Canada selected a steel floating production, storage, and offloading system (FPSO) for the proposed White Rose oil field development project on the Grand Banks off Newfoundland (OGJ, Mar. 27, 2000, p. 43). The FPSO will have production capacity of 100,000 b/d of oil and about 800,000 bbl of storage capacity. The vessel will be ice-strengthened and will support a topsides process plant. Operator Husky Oil holds a 72.5% interest in the field and Petro-Canada 27.5%.
Petroleo Brasileiro SA
let a 3-year, $108 million contract to R&B Falcon Drilling (International & Deepwater) Inc. for use of the Peregrine III dynamically positioned drillship off Brazil in 1,200 m of water. The drillship is currently at Galveston, Tex., where an upgrade involving installation of a new BOP stack and control system is under way.
Triton Energy Ltd.,
Dallas, let contract to Stolt Offshore Services SA to supply and install flowlines, risers, and control umbilicals to connect the first four development wells to an FPSO in Ceiba field off Equatorial Guinea (OGJ, Feb. 21, 2000, p. 34). Work includes installation of 60 km of 8-in. steel flowlines, 2.8 km of flexible risers, and 30 km of control umbilicals; each well will have two flowlines. Under another contract, a unit of Transocean Sedco Forex Inc. (TSF) will complete the four wells, two of which were drilled in 1999; the other two are to be drilled by TSF. The contract's scope was expanded to include an option for drilling two additional wells. The Sedco 700 semisbumersible rig will begin drilling in June.
Qatar General Petroleum Corp.
let a $200 million contract to ENI SPA unit Snamprogetti SPA for construction of a gas lift plant in Dukhan onshore field on Qatar's west coast. Snam is to supply detailed engineering, materials, equipment, construction, and start-up services for the plant. The work, slated for completion in 2002, will involve installation of new gathering and booster compressors, field-wide lift-gas gathering and distribution headers and flowlines, and gas dehydration and crude stabilization plants.
Chevron Overseas
Petroleum Azerbaijan Ltd.
(COPAL) let contract to Aker Marine Contractors Inc. (AMC), Houston, for the provision of a preset mooring system that will support COPAL's drilling program off Azerbaijan. The contract involves transportation of the system to Baku; a minimum 2-year lease of the system; storage of the system when not in use; and installation supervision during deployment, connection to the drilling rig, and recovery. AMC says it designed the system for use with either the Istigal or Dada Gorgud semisubmersible drilling rigs; the system would extend the rigs' mooring capabilities to 750 m of water.
Tankers
National Iran Tanker Corp.
let a $370 million contract to China Ship Heavy Industry Group Corp. and China Ship Industry Trade Co. for the construction of five 300,000-dwt very large crude carriers (VLCCs) for Iran. The VLCCs will be built at northeastern China's Dalian New Ship- yard, and delivery is expected before 2004.
Companies
Shell Exploration & Production Co.
and BP Amoco PLC let a 3-year contract to GreyStar Corp., Houston, to operate a group of oil and gas producing properties on High Island, Sabine Pass, and West Cameron block areas in the Western Gulf of Mexico. Shell and BP Amoco combined the operations to increase efficiency and reduce operating costs through economies of scale. GreyStar is to provide total asset management for the major firms' offshore surface production facilities. GreyStar's compensation will include a fixed-base amount, plus performance-specific incentive payments.
Midcoast Canada Operating Corp.,
a unit of Midcoast Energy Resources Inc., Houston, purchased the Provost natural gas plant and gathering system in east-central Alberta from NovaGas Canada LP, a division of TransCanada PipeLines Ltd., for an undisclosed sum (OGJ, Dec. 20, 1999, p. 32). The acquisition includes 80 miles of natural gas gathering pipeline; a 15 MMcfd sour gas processing plant; and sour gas injection wells. The system is connected to 21 oil batteries and gathers primarily associated sour gas produced from 900 Provost area wells.
Hurricane Hydrocarbons Ltd.,
Calgary, says it will pay $51 million (US) and an undetermined number of shares for a refinery in Kazakhstan, where it is an oil producer. Original terms for the purchase in September 1999 were $57 million for the OJSC Shymkentnefteorgsyntez refinery, but Hurricane has since made prepayments to the refinery. Hurricane has been operating under court protection, and a Calgary court is to rule on a repayment plan for creditors Mar. 31, when the deal is to close. Bondholders have already agreed to a repayment plan.
Krescent Energy Co. LLC,
Houston, recently made several transactions with an undisclosed seller involving the acquisition of the majority working interest in Hordes Creek field in Goliad County, Tex., and a 2% override in OCS South Timbalier Block 38. In addition, Krescent entered into a definitive agreement with an undisclosed seller to buy interests in eight fields in Louisiana and Texas. The properties involved in these deals contain proven and probable reserves worth about $25 million at a 10% discounted present value, Krescent said.
Gas processing
Enterprise Products Partners LP,
Houston, began commercial operation of its Neptune natural gas processing plant in St. Mary Parish, La. The Neptune plant is designed to process 300 MMcfd of natural gas and produce 25,000 b/d of NGL. The plant is presently running at two-thirds capacity and is producing 16,000 b/d of NGL that is transported on the Nautilus pipeline system to the Promix fractionator. Plant operator Enterprise holds a 66% ownership interest, and Marathon Oil Co., Houston, holds the remainder.
Refining
Tesoro Northwest Co.,
a unit of Tesoro Petroleum Corp., San Antonio, let contract to Halliburton unit Kellogg Brown & Root (KBR), Houston, to provide its residuum oil supercritical extraction (ROSE) and fluid catalytic cracking technologies for an upgrade at Tesoro's Anacortes, Wash., refinery. As part of an $80 million project, Tesoro will add a 21,000 b/d ROSE unit and incorporate KBR's FCC technologies into its existing 42,000 b/d FCC unit. The revamp will improve the refinery's ability to run heavier, less-expensive crudes without reducing products yield, said Tesoro.
OMV Deutschland GMBH
let contract to Kellogg Brown & Root to use its MAKFining Premium Distillates technology (MPDT) for the production of premium diesel at its Burghausen, Germany, refinery. The applications of MPDT will use a combination of MAKFining catalyst systems. Upon completion, OMV's project will be a grassroots unit capable of processing 12,000 b/d of atmospheric distillate and gas oil feedstocks, to produce high-quality diesel motor fuel with less than 10 ppm sulfur content.
Exploration
Canada-Newfoundland
Offshore Petroleum Board will call for bids on 14 parces covering a total of 2,251,670 hectares off Newfoundland. Three parcels (1, 2, and 3) are located in Jeanne d'Arc basin, four in Carson Bonnition basin (4, 5, 6, and 7), six in South Whale basin (8, 9, 10, 11, 12, and 13), and one adjacent to the Newfoundland West Coast area (14). The minimum bid is $1 million, except for the West Coast parcel, which has a $250,000 minimum. Winning bidders will be issued a 9-year exploration license and must drill a well during the first 5 years.
Anadarko Petroleum Corp.
and partners drilled a delineation well in Hickory field on Grand Isle Block 116 off Louisiana in the Gulf of Mexico (OGJ, Oct. 26, 1998, Newsletter). Drilled to 18,000 ft TD, the No. 2 well cut main field pay zones downdip of the No. 1 discovery well, about 1 mile north. The partners plan to drill 2,400 ft deeper in the delineation well in an effort to extend the lower limits of additional pay intervals cut by the discovery well. Interests in Grand Isle Blocks 110, 111, and 116-which hold Hickory-are operator Anadarko 50%, Shell Offshore Inc. 37.5%, and Ocean Energy Inc. 12.5%.
Swift Energy Co.,
Houston, claims to have made a significant oil and natural gas discovery on the west coast of New Zealand's North Island. Swift Pres. Terry Swift claimed the find could hold as much as 200-500 million boe. The find is on the Kauri structure in southern Taranaki province. Two recent discoveries in the area, Rimu and Kauri, could actually be one field, Swift said (OGJ, Jan. 3, 2000, p. 30, and Oct. 18, 1999, p. 91).
Government
The UK and Sweden
signed a strategic agreement that will allow oil companies in each country to pool their reserve oil stocks. The European Commission requires all EC member states to hold contingency oil stocks equivalent to 90 days of their average daily consumption as a stopgap against oil supply disruptions. Negotiations are already under way for similar arrangements with Denmark, the Netherlands, Belgium, and France.
Power
Sithe Energies Inc.,
New York, obtained $277 million in financing needed to build the 230-Mw Termoelectrica Del Golfo power plant at Tamuin in Mexico's San Luis Potosi state. Sithe will operate the plant over a 20-year period, and ABB Alstom Power will provide long-term maintenance. Sithe and ABB are 50-50 equity investors in the project. The plant-slated to start operations in fourth quarter 2002-will supply power to 13 of Cemex SA de CV's plants holding self-supply permits in Mexico. The project is the first private power plant to be financed under Mexico's energy self-supply law. The plant is based on ABB's circulating fluidized bed boiler technology.
Taiwan Styrene Monomer Corp.
(TSM) plans to form a joint venture with Japan's Mitsubishi Group and Powergen PLC, London, to build a 600-Mw power plant in central Taiwan. TSM will hold a 51% stake in the project-which will call for $650 million in investments-while Mitsubishi and Powergen will share a 49% stake. TSM said a formal contract will be signed soon in Tokyo, and construction is to begin in the second half. To fund its share of the project, TSM will issue 78.5 million new shares of stock to be priced at $35 (Twn.)/share.
