The US Pipeline and Hazardous Materials Safety Administration is considering possible changes in its regulations covering onshore liquid pipelines, the US Department of Transportation agency said on Oct. 18. It will accept comments through Jan. 18, it said in a Federal Register advance notice of probable rulemaking.
Possible changes include extending regulations to currently exempt pipelines, identifying other areas along a pipeline for extra protection or including them as additional high-consequence areas (HCAs) for integrity management protection, and establishing standards for minimum leak detection requirements for all pipelines, according to the notice.
PHMSA also is considering whether to require installation of emergency flow-restricting devices in certain areas, whether revised valve spacing requirements are needed on new construction or existing pipelines, and whether repair timeframes should be specified for pipeline segments outside HCAs that are assessed as part of integrity management programs, it said.
The agency also is looking at possibly establishing standards and procedures to improve methods for preventing, detecting, assessing, and remediating stress corrosion cracking in hazardous liquids pipelines, PHMSA said. "Comments should address the public safety and the environmental aspects of new requirements, as well as the cost implications and regulatory burden," it indicated.
Chavez promises to supply Belarus with oilVenezuelan President Hugo Chavez has promised to supply Belarus with 30 million tonnes of oil over 3 years starting in 2011, reports Radio Free Europe/Radio Liberty.
Chavez met with Belarus President Alyaksandr Lukashenka in Minsk, where he was reported to have said, "The refineries of Belarus will not lack petrol for the next 200 years."
Russia, the traditional supplier of oil and gas to Belarus, raised concerns in Europe last June by cutting gas shipments to Belarus in a price dispute and jeopardizing transit volumes. Belarus has cut its oil purchase from Russia in response to new export duties.
Chavez visited Belarus after a stop in Russia. Russian Prime Minister Vladimir Putin urged state-owned Gazprom to reach a deal with Belarus for gas supplies through 2015.
ConocoPhillips, Sasol settle pollution chargesConocoPhillips Co. and Sasol North America Inc. agreed to pay $4.5 million to reimburse the federal chemical waste Superfund and complete a more than $10 million cleanup of Bayou Verdine in Louisiana's Calcasieu Estuary to settle federal pollution charges, the US Justice Department and Environmental Protection Agency jointly announced on Oct. 13.
The two companies were charged with violating the federal Clean Water Act and Comprehensive Environment Response, Compensation, and Liability Act (CERCLA) for allegedly dumping or discharging wastes from their refineries and petrochemical facilities into Bayou Verdine southwest of Westlake in Calcasieu Parish.
ConocoPhillips and Sasol previous agreed with EPA to perform an engineering evaluation and cost analysis of Bayou Verdine, DOJ and EPA said. Remedial investigations in 1999 subsequently found arsenic, polynuclear-aromatic hydrocarbons, zinc, copper, mercury and other hazardous substances in the bayou and the adjacent Coon Island Loop of the Calcasieu River, the complaint said.
DOJ said it also lodged a second consent decree to resolve the two companies' liability for natural resource damages in the estuary resulting from the alleged hazardous substance discharges. It said that federal and state natural resources trustees worked with the two companies over several years to assess injuries and develop a restoration plan.
Under that settlement's terms, ConocoPhillips and Sasol agreed to reimburse the trustees nearly $1.2 million for a share of past natural resource damages assessment costs, construct a restoration project selected by the trustees in the Sabine Wildlife Refuge, and pay another $750,000 for the restoration project's future monitoring, DOJ and EPA said.
Chevron Corp., in a move signaled last month with the award of a major contract, has given official sanction to the integrated development of Jack and St. Malo deepwater oil fields in the Lower Tertiary trend of the Gulf of Mexico (OGJ Online, Sept. 7, 2010).
Chevron will develop the fields, 25 miles apart in 7,000 ft of water, to produce into a semisubmersible floating production unit. Initial investment will be $7.5 billion.
The project covers three subsea centers tied back to the production facility, which will have capacities of 170,000 b/d of oil and 42.5 MMcfd of natural gas. First production is due in 2014.
The contract awarded last month went to Mustang for detail design of the semi's topsides.
The fields are in the Walker Ridge area 280 miles south of New Orleans. Chevron estimates recoverable resources at more than 500 million boe.
It has drilled seven exploration and appraisal wells in the area since 2003. The Lower Tertiary reservoirs occur at 26,500 ft.
Chevron operates the project with working interests of 50% in Jack field, 51% in St. Malo, and 50.67% in the host facility.
Lukoil-Vanco to drill off Ghana, Ivory CoastGroups led by Russia's OAO Lukoil and Vanco Energy Co., Houston, plan to drill at least five wells in 2011-12 in the Gulf of Guinea off Ghana and Ivory Coast near discoveries off both countries.
State oil company partners Ghana National Petroleum Co. and Petroci will participate in the program, which includes exploratory and appraisal wells.
The drilling contractor Ocean Rig, a subsidiary of Dryships Inc., signed contracts to drill four wells on the Cape Three Points Deep Water block off Ghana, including two exploratory wells on new structures and two appraisal wells on the Dzata structure, where an oil and gas discovery was announced in February.
The Dzata discovery in a Cenomanian-Albian faulted anticlinal trap that opened a new prospective trend in the eastern part of the Tano basin (see map, OGJ, Mar. 15, 2010, p. 34).
Dzata-1 went to a total depth of 4,433 m in 1,878 m of water 45 miles south of Cape Three Points, Ghana, and cut 94 m of gross hydrocarbon column topped at 3,653 m with 25 m of net stacked oil and gas pay. The primary reservoir sandstone at 3,663-90 m contains gas and light oil. Volatile black oil was recovered from a zone at 3,701-09 m.
In Ivory Coast, the drillship is to drill one exploratory well in Block CI-401, where the Orca-1X bis well was completed in May. The contracts provide for one more optional well and an optional further 1-year term.
Drilling is to start off Ghana in April-May 2011 and off Ivory Coast in the first quarter of 2012. Each well is to be drilled in roughly 1,900 m of water by a dynamically positioned, sixth-generation drillship capable of working in as much as 3,000 m of water. The unit is being prepared for flotation at the Samsung shipyard in South Korea.
The CTPDW and CI-401 projects share similar ownership structures whereby Lukoil holds 56.66% and 28.34% belongs to Vanco Ghana Ltd. and Vanco Cote d'Ivoire Ltd., respectively; the state companies each own 15%.
Seismic surveys and drilling of one exploratory well have been performed on each block thus far.
Noble begins drilling Leviathan gas prospectA consortium led by Noble Energy Inc. has begun drilling at its Leviathan natural gas prospect in the eastern Mediterranean, according to one of the partners in the group.
Delek Drilling, in a statement to the Tel Aviv Stock Exchange, said a rig arrived at the Leviathan site, 135 km off northern Israeli, and began drilling in 1.6 km of water. Delek said the drilling is expected to reach a final depth of 7.2 km and will last about 5 months.
The group, which has reported the possibility of finding oil under the gas, earlier estimated Leviathan's reserves at 16 tcf of gas and gave the project a 50% geologic chance of success (OGJ Online, Aug. 9, 2010).
Last month, Noble sanctioned the $3 billion development of Tamar gas field in the Levant basin in the eastern Mediterranean off Israel and expects gas delivery to begin about yearend 2012.
Tamar, with an estimated 8.4 tcf of recoverable gas in 5,500 ft of water, is to be developed with five subsea wells capable of flowing 200-250 MMcfd/well of gas (OGJ Online, Sept. 24, 2010).
Analyst BMI noted that while the Tamar development is expected to provide a new source of gas for Israel for the foreseeable future, "attention is on Leviathan as a potential source of further domestic insurance and a resource that could give Israel the option to export gas to neighboring states or further afield."
Gas find extends Krishna Godavari basin playA shallow-water natural gas and condensate discovery off eastern India opens an exploratory province east-southeast and west-southwest of Kesavadasupalem and Kesanapalli West fields in the Krishna-Godavari basin, reports Oil & Natural Gas Corp.
The GS-KV-1 well, drilled to 2,908 m in 8 m of water 3 km offshore on the IF PEL block, tested hydrocarbons from intervals at 2,696-98 m, 2,691-94 m, and 2,672-77 m in the Miocene Ravva formation.
Drilling & Production — Quick TakesStatoil hiring rig for Gullfaks drillingStatoil has signed a letter of intent to use a Songa Offshore semisubmersible rig for at least 3 years of drilling in aging Gullfaks oil field in the Norwegian North Sea.
The operator didn't say how many wells it planned to drill with the Songa Dee semi but included an option in the agreement to extend the contract by 1 year.
In a presentation at the 2008 World Petroleum Congress, a Statoil representative said the company had increased the Gullfaks recovery factor to more than 60% and hoped to boost it to 70% and sustain production to 2030 (OGJ, July 14, 2008, Newsletter). He said much of the success came from drilling to targets identified via 4D seismic data and interpretation.
The Norwegian Petroleum Directorate estimates average 2010 production from Gullfaks at 72,000 b/d of oil and a total of 60,000 tonnes of NGL. The field, discovered in 1978 and on production since 1986, has three integrated, concrete-based platforms in 130-220 m of water. It produces from Middle Jurassic Brent Group sandstones at 1,700-2,000 m below sea level, mainly through waterflood. Statoil holds a 70% interest; Petoro AS holds the remainder.
Value of the drilling contract is about $378 million. The Songa Dee can drill to 30,000 ft in as much as 1,800 ft of water.
Shell proceeds with Phase 2 of Parque das ConchasRoyal Dutch Shell PLC plans to proceed with Phase 2 of its Campos basin Parque das Conchas project, 62 miles off Brazil.Phase 2 will develop a fourth field in Block BC-10, Argonauta O-North (OGJ, May 5, 2008, p. 54). Shell said the project will recover about 300 million boe at rates of about 100,000 boe/d.
Production from the first phase of Parque das Conchas started in 2009 from nine wells in three fields—Abalone, Ostra, and Argonauta B-West. Phase 2 includes seven additional development wells, which will have TDs of about 3,600 ft.
Parque das Conchas was the first full-field development to separate and pump oil and gas from the seabed. The project has 1,500-hp electric pumps for lifting the 16-42° gravity oil from the wellheads to the Espirito Santo floating, production, storage, and offloading vessel, moored in 1,780-m of water.
The facilities on the FPSO can process about 100,000 bo/d and 50 MMcfd of gas.
Shell notes that to obtain better production rates, the fields are developed with extended reach, horizontal wells. Operator Shell holds 50% interest in the development. Partners are Petroleo Brasileiro SA 35% and ONGC Videsh Ltd. 15%.
CNOOC starts two Bohai Bay oil fieldsCNOOC Ltd. has started production from two oil fields in Bohai Bay off China.
Bozhong (BZ) 26-3 field is producing from four wells and using facilities of neighboring fields. It's expected to reach peak flow of more than 6,600 b/d next year. Water depth in the central Bohai Bay field is about 25 m.
In the eastern Bohai Bay, Luda (LD) 32-2 field also is producing from four wells in 25 m of water, expected to reach peak output of 6,300 b/d in 2011. The field was developed jointly with nearby LD 27-2 field.
CNOOC operates and holds 100% interests in both fields.
Another Jordan oil shale agreement nears signingJordan Energy & Mining Ltd. is close to signing an agreement with Jordan for a 40-year commercial oil shale project, according to a presentation by Christopher Morgan of Jordan Energy and Mining at the Colorado School of Mines 30th Oil Shale Symposium, Golden, Colo.
This will be the third commercial agreement signed by Jordan. Its first agreement was with a subsidiary of Royal Dutch Shell PLC, signed in May 2009 (OGJ, May 25, 2009, Newsletter) and the second was with Eesti Energia, signed in May (OGJ, Aug. 2, 2010, p. 70). Besides these commercial agreements, Jordan also has memorandums of understanding for oil-shale development with several other companies.
The Jordan Energy and Mining Al Lajjun project will mine and process the oil shale in two 500 tonne/hr Alberta Taciuk Process retorts. Miller said the project may start first commercial oil-shale production in 2014 at 15,800 b/d.
Initial capital cost of the project will be about $1.8 billion and the operating costs will be about $23/bbl, according Miller.
Currently Fushun Coal Mining Co. is commissioning a 6,000 tonne/day Alberta Taciuk Process retort in China's Liaoning Province. The ATP Fushun retort will begin trial operations by yearend, according to a presentation at the CSM symposium by Shuyuan Li of the China University of Petroleum, Beijing. Li said besides the ATP Fushun retort, China has many other types of oil-shale retorts that in 2010 will produce about 4 million bbl of oil.
PROCESSING — Quick TakesExpansion set for Mont Belvieu fractionatorGulf Coast Fractionators, a partnership operated by ConocoPhillips, plans a 42% expansion of its gas liquids fractionation plant at Mont Belvieu, Tex. The $75-million project will increase capacity to 145,000 b/d. The expansion is to come online in second-quarter 2012. Construction is not expected to disrupt existing operations. Other partners are Devon Energy Corp. and Targa Resources Partners LP.
Ecopetrol refinery starts hydrotreatment plantEcopetrol SA has started up a hydrotreatment complex for production of ultralow-sulfur diesel and gasoline at its 205,000-b/cd Barrancabermeja refinery in Santander, Colombia.
Ecopetrol said the plant includes diesel hydrotreatment, gasoline hydrotreatment, hydrogen production, sour-water disposal, sulfur-recovery, tail-gas treatment, and amine regeneration units. Ecopetrol invested $1.023 billion in the project.
The refinery now can produce gasoline with a sulfur content of 300 ppm and diesel with 50 ppm sulfur. Colombian law calls for 50 ppm sulfur diesel in mass transit in Bogata and Medellin and 500 ppm elsewhere. By the end of 2012 the lower diesel sulfur standard will apply throughout Colombia.
The project uses Axens hydrotreating technology. Ecopetrol estimates the plant will remove 42.7 tonnes/day of sulfur from the refinery's gasoline and diesel streams.
Wynnewood refinery gets hydrotreaterWynnewood Refining Co. soon will start up a 13,000 b/sd FCC gasoline hydrotreater at its 70,000-b/cd refinery at Wynnewood, Okla. KP Engineering LP, Tyler, Tex., installed the unit under an engineering, procurement, and construction management contract. The hydrotreater, based on Axens technology, cuts gasoline sulfur content to less than 50 ppm.
Contract let for PE facility in EgyptCarbon Holdings of Egypt has let a project management consultancy contract to Foster Wheeler USA Corp. for a polyethylene facility at a petrochemical complex it is developing in Ain Sokhna, Egypt. Nameplate capacity is 1.35 million tonnes/year.
Foster Wheeler will provide technical support and consulting until financial close, expected in late 2011. The facility is due on stream in 2015.
Earlier this year, Carbon Holdings licensed the Univation Technologies UNIPOL polyethylene process for three trains at Ain Sokhna with capacities of 450,000 tpy each. One train will produce high-density polyethylene (HDPE). Two swing lines are to produce linear low-density polyethylene and HDPE.
Last year, the US Trade and Development Agency awarded Egypt Hydrocarbon Corp. a $263,601 grant to evaluate the proposed construction of a steam cracker complex at Ain Sokhna capable of producing 400,000 tpy of propylene and 900,000 tpy of ethylene from naphtha.
TRANSPORTATION — Quick TakesETP announces two Eagle Ford gas pipelinesEnergy Transfer Partners LP will build two new natural gas pipelines, Dos Hermanas and Chisholm, in the Eagle Ford shale. The 50-mile, 24-in. OD Dos Hermanas Pipeline will move 400 MMcfd between northwest Webb County, Tex., and ETP's existing Houston Pipeline rich-gas gathering system in eastern Webb County. The partnership expects the line to be complete by December and will add 6,000 hp of compression to the Houston Pipeline System to handle the extra natural gas.
The initial phase of the Chisholm Pipeline will consist of about 83 miles of 20-in. OD line extending from DeWitt County, Tex., to ETP's LaGrange processing plant in Fayette County, Tex. The pipeline will have an initial capacity of 100 MMcfd, with anticipated expansion to more than 300 MMcfd. The project will use existing processing capacity at ETP's LaGrange plant, with residue volumes transported on its Oasis Gas Pipeline System. ETP expects this initial phase of the pipeline to enter service by second-quarter 2011.
ETP has entered into multiple long-term agreements with shippers to provide transportation services from the Eagle Ford shale using the new pipelines. Enterprise Products Partners last month announced agreements and construction to transport and process Anadarko's Eagle Ford natural gas production (OGJ Online, Sept. 22, 2010).
Koch to move Eagle Ford crude to Corpus ChristiKoch Pipeline Co. LP and NuStar Logistics agreed on a pipeline connection and capacity lease agreement giving Koch Pipeline additional capacity to transport Eagle Ford shale crude oil to Corpus Christi, Tex. The project involves reactivation of NuStar's idle Pettus South Pipeline, which runs 60 miles from Pettus, Tex., to Corpus Christi.
NuStar will operate the pipeline, with Koch Pipeline leasing the capacity and combining it with its existing gathering systems to move crude from Eagle Ford shale fields to Corpus Christi refineries and terminals. Koch and NuStar expect the project to be completed and in service in second-quarter 2011, adding at least 30,000 b/d of new capacity to Koch's system, with expansion to about 50,000 b/d possible.
Koch is seeking additional opportunities in increase pipeline capacity to Corpus Christi refineries and Flint Hills Resources Ingleside waterborne terminal. In May, the company completed projects increasing its crude oil and gas condensates transportation capacity in South Texas by about 25,000 b/d.
Koch Pipeline is also building a line to expand delivery capability to Ingleside and is increasing transportation capacity by 40,000 b/d from its existing system in the northern Eagle Ford counties. This increase will be final during first-half 2011.
Last month, in conjunction with Arrowhead Pipeline LP, Koch announced an agreement and joint tariff to add 50,000 b/d of crude and condensate capacity during 2011 from the western counties of Eagle Ford.
Enterprise Products Partners LP announced in September plans to build a 140-mile, 350,000 b/d pipeline to move Eagle Ford crude to both Houston-area refineries and the Cushing, Okla., storage hub (OGJ Online, Sept. 1, 2010).
GAIL signs contract for Dabhol-Bangalore lineGAIL (India) Ltd. signed a $153 million contract with Punj Lloyd Ltd. for laying its 1,400-km Dabhol-Bangalore Pipeline project, describing the agreement as part of its commitment to bring natural gas supplies to Karnataka by 2012. Construction will start by November and the pipeline will be ready by March 2012. Following commissioning, GAIL expects operations to begin by June 2012.
GAIL approved the 16 million cu m/day (565 MMcfd), 30-in. OD project in June 2009 at an estimated total cost of Rs. 5,000 crore and has since applied for statutory permission for railway, highway, and river crossings. GAIL divided the project—extending from Dabhol to Bidadi and including two spur lines into 10 spreads.
Of the 10 spreads, GAIL awarded 7 to Punj Lloyd Ltd, 2 to KSS-KSSIIPL Consortium, and 1 to Advance Stimul Consortium.
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