Correction
An expansion
of the Tarong power plant in Queensland, Australia, was incorrectly described as being natural gas-fired (OGJ, Jan. 3, 2000, Newsletter). The 450-Mw expansion will be fired on coal.
Pipelines
A crude oil pipeline in Sudan
was damaged by a bomb on Jan. 16 at a point 53 miles southwest of Port Sudan. The resulting fire was extinguished quickly, and most of the spilled oil was captured in trenches, says Talisman Energy Inc., Calgary, a partner in the project. No injuries were reported. Oil was expected to resume flowing on Jan. 18 through the line to Beshair terminal on the Red Sea. Damages were estimated at about $400,000. The government blames the Bejah Congress for the attack, the second on the pipeline since it started up last July (OGJ, Sept. 27, 1999, p. 43). The group has denied involvement.
Corridor Pipeline Ltd.,
a unit of BC Gas Inc., let contracts to Ipsco Inc., Regina, Sask., and Agra Inc. unit Midwest Management, Edmonton, for its $690 million (Can.) heavy oil pipeline project in Alberta (OGJ, Jan. 10, 2000, p. 22). Ipsco will provide steel for the 280-mile, 24-in. line from a new oilsands project at Muskeg River in northern Alberta to Shell Canada Ltd.'s Scotford refinery near Edmonton. Midwest will lay 12 and 24-in. lines in a common trench to move materials to and from the Scotford plant. Construction is scheduled to begin this summer, with completion expected in mid-2002.
Exploration
Chevron Canada Resources Ltd.
production-tested its M-25 natural gas well 18 km northwest of Fort Liard, NWT. At the end of a 4-day test, M-25, drilled to 3,770 m TD, flowed at a restricted rate of 28 MMcfd of gas from the Nahanni through a 31/2-in. tubing string. Production is slated to begin in fourth quarter 2000. Interest holders include: operator Chevron, 43.4318%; Purcell Energy Ltd., 24%; Berkley Petroleum Corp., 21%; Anderson Resources, 4.1%; Paramount Resources Ltd., 2.7602%; Ranger Oil Ltd., 1.197%; Canadian Natural Resources Inc., 0.90736%; Numac Energy Inc., 0.82%; AEC West Ltd., 0.336%; and Talisman Energy, 0.21%.
TransCanada PipeLines Ltd. unit
TransCanada International (Netherlands) BV and Gulf Canada Resources Ltd. unit Clyde Petroleum Exploratie BV made a natural gas discovery with their G17-4 exploration well in the Dutch North Sea. The well, which flowed 40 MMcfd on test, is operated by TransCanada. The partners, which hold equal shares in the well, expect to begin production early in 2002.
Unocal Corp.
unit Spirit Energy 76 made a natural gas discovery in 240 ft of water on Ship Shoal Block 295 off Louisiana. The Muni well logged more than 450 ft of hydrocarbon pay in three zones, with indication of additional possible pay, according to Unocal. Gas production, which Unocal expects to reach 100-130 MMcfd, is slated to begin in 2001.
Refining
Production resumed
from Thai Oil Co.'s Sri Racha refinery following a Dec. 2 explosion and fire that killed at least six people (OGJ, Dec. 20, 1999, p. 38). Damages to the plant were assessed at 1 billion baht. Output will be 100,000 b/d initially before ramping up to 220,000 b/d by the end of January. Four refinery technicians were charged with causing the 36-hr blaze, which was in the oil products tank area.
Petroplus International NV,
Rotterdam, agreed to acquire Royal Dutch/ Shell's Cressier refinery in Switzerland for $131 million. Petroplus opened talks with Shell in mid-1999 over the possibility of purchasing the 68,000 b/d plant (OGJ, July 19, 1999, Newsletter). Along with a 100% interest in the refinery, Petroplus also will acquire: Shell's Swiss-based wholesale commercial sales operations; storage depots in Switzerland with a combined capacity of 5.5 million bbl; and Shell's stake in the pipelines that supply the refinery.
Indian Oil Corp.
(IOC) let contract to Engineers India Ltd. for engineering, design, and project management of the Eastern India refinery project at Paradip in India's Orissa state. The 9 million tonne/year coastal plant will have a terminal with a single-point mooring system and both subsea and onshore pipelines, says IOC. Major units will include crude and vacuum distillation units, a hydrocracker, a continuous-regeneration catalytic reformer, and a delayed coker. Power generation will be provided via an integrated gasification combined-cycle unit.
Pennzoil-Quaker State Co.,
Houston, will shut down its 15,700 b/d Rouseville, Pa., refinery Jan. 31. Pennzoil will also close a packaging plant near the refinery by June, the company said. The decision to close the plants follows an announcement that the firm would take a $480 million pretax write-down on its Rouseville and Shreveport, La., refineries.
Petrochemicals
Borealis AS,
Lyngby, Denmark, plans to establish a joint venture with E.I. du Pont de Nemours & Co. to produce polyolefins and ethylene copolymers at Borealis's 125,000 tonne/ year Zwijndrecht plant near Antwerp. Under the agreement, DuPont will acquire Borealis's Borflex ethylene acrylate copolymer business and technology along with a 50% interest in the Zwijndrecht plant. The new JV-expected to be formed by third quarter 2000-will operate the reactors and supporting assets at the site. Borealis will retain technology rights for its wire and cable business.
Chemopetrol,
the state petrochemical company of the Czech Republic, let contract to Germany's Linde AG for the construction of a 200,000 high-density polyethylene plant at the Litvinov complex, according to Eastern Bloc Research Ltd., Tadcaster, UK. Construction of the plant, which will use Union Carbide Corp.'s Unipol technology, is slated for completion by mid-2002. The deal follows a contract let to Technip Benelux early in 1999 to expand ethylene and propylene capacity at the plant to 560,000 tonnes/year and 280,000 tonnes/year, respectively, by 2003.
Financing
Nigeria Liquefied Natural Gas Co.
(NLNG) unit Bonny Gas Transport secured a $160 million, 10-year loan from a group of banks led by Credit Suisse First Boston. The loan will be used to cover a significant portion of the costs of two new 138,000 cu m LNG vessels that are needed to transport increased LNG volumes from the addition of a third train at NLNG's Bonny LNG plant (OGJ, Sept. 27, 1999, p. 32). The expansion is expected to come on stream in fourth quarter 2002. The vessels will be built by South Korea's Hyundai Heavy Industries Ltd. and are slated for delivery in August and September 2002.
Companies
Lundin Oil AB,
Stockholm, and Red Sea Oil Corp., Vancouver, BC, have opened merger talks. The firms' boards have agreed in principle to proceed with a combination, which will likely result in the offering of newly issued Lundin shares to Red Sea shareholders. Lundin owns 58% of the outstanding shares in Red Sea, and the companies share interest in Libya's Area NC177, which includes the undeveloped En Naga North and West oil fields (OGJ, June 21, 1999, p. 66). The terms of the transaction will be announced by Feb. 29, say the companies.
Italy's ENI SPA
acquired through subsidiaries AgipPetroli, Snam SPA, and Italgas a 33.34% stake in Petr
Conoco Inc.
reported that its operations in Caracas and the Petrozuata heavy oil project were unaffected by the December flood in Venezuela. The company has committed $1 million in aid to the relief effort in Venezuela.
Power
Calpine Corp.,
San Jose, Calif., acquired a 50% interest in the 600-Mw Aries natural gas-fired power plant being built near Pleasant Hill, Mo., from Merchant Energy Partners, a unit of Aquila Energy Corp., Kansas City. The plant will start up at a capacity of 330 Mw in June 2001, with full production expected in January 2002. Missouri Public Service will purchase most of the output during June 2002-May 2005, after which the Southwest Power Pool electricity market area-covering Kansas, Oklahoma, western Missouri, and parts of Texas, Arkansas, New Mexico, and Louisiana-will buy most of the power.
AEP Resources Inc.,
a unit of American Electric Power, Columbus, Ohio, acquired from InterGen a 50% share of the 600-Mw, natural gas-fired Baj
LNG
Repsol-YPF SA and partners
received approval from Trinidad and Tobago for construction of two more LNG production trains at the Atlantic LNG Co. plant at Point Fortin, Trinidad. Construction costs for the new trains are pegged at 180 billion pesetas. Once operational, the new trains will produce 9 billion cu m/year of LNG-55% of which will go to supply markets in Spain. Repsol-YPF holds a 20% stake in Atlantic LNG Co.
Taiwan's Industrial Development Bureau
(IDB) said the island's third LNG terminal will built at the Changpin Industrial Park in central Taiwan's Changhua County. IDB's plan calls for the construction of a series of wharves on an 11-m shipping channel in the park. The LNG terminal will supply a $294 million natural gas-fueled power plant that Taiwan Power Co. plans to build at Changpin.
Drilling-production
Chevron USA Inc.
settled a court case involving the amount of royalties paid on oil produced from federal lease areas. Chevron will pay the US government $95 million to settle the so-called Lufkin suit, which alleged companies had knowingly undervalued oil production to reduce royalties owed the government (OGJ, Mar. 2, 1998, p. 44). Chevron said it "agreed to the payment to close the dispute and avoid the expense of litigation and attendant risk but does not acknowledge any wrongdoing or liability." It added it will work with Congress and the Department of the Interior to "develop clearer, less burdensome, and more appropriate" oil valuation rules.
Phillips Petroleum Co. UK Ltd.
and its partners received approval from the UK Department of Trade and Industry for the development of Jade field on Block 30/2c in 80 m of water in the UK North Sea (OGJ, May 10, 1999, p. 37). Design and construction work on the field will begin this month. The field, expected to reach production of 188 MMcfd of gas and 16,000 b/d of oil, is slated to come on stream in fourth quarter 2001. Operator Phillips holds a 32.5% interest in Jade. Other owners are BG International Ltd. (35%), Texaco North Sea UK Co. (19.93%), Agip (UK) Ltd. (7%), and OMV (UK) Ltd. (5.57%).
Talisman Energy UK
received approval for subsea development of Blake oil field in the outer Moray Firth off Scotland. Development spending will total $380 million (Can.). Blake wells will be tied back to Talisman-operated Ross field, which uses the Bleo Holm floating production, storage, and offloading vessel (OGJ Aug. 9, 1999, p. 35). Reserves in the main Blake reservoir are estimated at 50-75 million bbl. First oil is slated for August 2001, and production is expected to peak at 40,000 b/d. Field life is estimated at 14 years. Interest holders are: Talisman, 53.6%; BG International, 44%; and Paladin Resources, 2.4%.
BHP Petroleum Pty. Ltd.
and partners BP Amoco PLC, Elf Aquitaine SA, Veba Oil & Gas, and Total Oil Marine will spend $62 million (Aus.) to develop Keith oil field, 320 km northeast of Aberdeen. BHP has a 31.83% equity in the project. The development will include reuse of a suspended appraisal well (9/8a-14) that will be tied back 7 km to the Bruce field Western Area Development, in which BHP has a 16% interest. The single well is expected to tap into about 15 million boe of proved and probable reserves. Reentry and completion are slated to begin in third quarter 2000; the well will be brought on stream by yearend. BHP says the performance of the well will determine if further development is warranted.
Oilsands
Husky Oil Ltd.,
Calgary, put plans on hold for a $500 million (Can.) expansion of its heavy oil upgrader at Lloydminster, Alta. Construction start will now be delayed until 2001 at the earliest. Plans originally called for a start in second half 1999 of a project to increase production to 150,000 b/d from 50,000 b/d. Husky said the expansion is not canceled and it is still evaluating new processes and technology. The company will make a decision on the project in fourth quarter 2000; it would then have to complete engineering design and seek regulatory approval in 2001.