LNG
Oman LNG LLC (OLNG) let a contract valued at more than $1 billion to Chiyoda-Foster Wheeler & Co., a joint venture of Japan's Chiyoda Corp. and Foster Wheeler Corp., Clinton, N.J., for engineering, construction, and procurement of a 6.6 million metric ton/year, two-train LNG plant at Al-Ghalilah, Oman. Work began immediately after the contract signing Nov. 14 for completion by 2000, when OLNG is slated to begin exporting as much as 4.1 million tons/year for 25 years to South Korea (OGJ, Nov. 4, p. 43).
Malaysia LNG Tiga Sdn. Bhd. and Chinese Petroleum Corp. (CPC) signed a preliminary agreement for Malaysia LNG to supply CPC with 2 million tons/year of LNG for 20 years, starting in 2001. LNG is to be supplied cif via carriers owned by Malaysia's Petronas Tankers Sdn. Bhd.
Companies
Chevron Corp. unit Chevron Overseas Petroleum Inc. signed a letter of intent with Bahrain National Oil Co. to jointly study potential for upstream ventures, including possible technical services and feasibility of cooperation in petroleum exploration, development, and technology transfer. The agreement also provides opportunities to study enhanced oil recovery approaches in continuing development of Bahrain oil field.
Cairn Energy plc, Edinburgh, effectively gained control of Command Petroleum Ltd., Sydney, following acceptance by major shareholder Snyder Oil Corp., Fort Worth, of Cairn's $1.10 (Australian)/share offer, (OGJ, Oct. 14, p. 31). The move gives Cairn Snyder's entire 32.6% interest in Command. Cairn has moved to make its takeover offer of $375 million (Australian) unconditional. Australia's government approved the offer.
Enterprise Oil plc and Amoco (U.K.) Exploration Co. traded assets in a number of U.K. North Sea blocks. Enterprise will gain a further 2% interest in Banff field, a 25.77% interest and operatorship of Block 13/21a, and 32% and operatorship of Block 22/13a. Amoco will gain an extra 25.77% interest in Blocks 30/11b and 30/12b, containing its Appleton and Halley discoveries, 6.03% of Block 22/18 excluding Montrose and Arbroath fields, and 0.23% in Block 15/22, excluding Scott and Telford fields.
Parker Drilling Co., Tulsa, completed purchase of Mallard Bay Drilling Inc. from Houston's Energy Ventures Inc. for $335 million in cash and stock and Quail Tools for $65 million in cash. Both acquired companies are in New Iberia, La. (OGJ, Sept. 23, p. 47).
Exploration
Amoco Corp. completed 5 Parlange deeper-pay discovery in Judge Digby field as part of its Tuscaloosa trend redevelopment program near New Roads, La. The well is yielding sales rates of 18 MMcfd of gas and 450 b/d of condensate from middle Cretaceous Tuscaloosa perforations at 21,500 ft at 8,900 psi flowing tubing pressure. Amoco, which claims the strike is yielding Louisiana's deepest commercial production, produces 240 MMcfd of gas and 16,400 b/d of condensate in the trend. It has drilled 13 consecutive successful wells; two more are under way, and as many as five are planned.
Petroleum Geo-Services ASA, Houston and Oslo, let contract to Norway's Langsten Slip & Batbyggeri shipyard to construct two new seismic survey vessels of the Ramform design. Total investment, including seismic equipment, will be about $160 million. New vessels, third and fourth of this design, will be delivered during first half 1998. Ramform Explorer and Ramform Challenger were placed into operation in mid-1995 and April 1996, respectively.
U.S. Minerals Management Service put its latest 5-year offshore leasing plan into effect Nov. 14 after Interior Sec. Bruce Babbitt's approval. The 16-sale program calls for five sales off Alaska, annual sales in the central and western Gulf of Mexico, and one sale in the eastern gulf (OGJ, Sept. 2, p. 26).
Pipelines
Bear Paw Energy Inc., a unit of TransMontaigne Oil Co., Denver, agreed to acquire for cash all of the North Dakota and northeastern Montana gas gathering, transmission, and certain processing plants of Koch Industries Inc. unit Koch Hydrocarbon Co. The deal, expected to close by Jan. 31, 1997, includes about 2,500 miles of gas gathering and transmission pipelines and plant complexes with a combined throughput capacity of 75 MMcfd. Bear Paw said the acquisition will complement its current activities in the Williston basin of North Dakota and Montana.
Petroleos Brasileiro SA (Petrobras) last week was to inaugurate a $385 million, 966 km, 132,330 b/d capacity multi-products pipeline from the Paulinea refinery in Sao Paulo state to Brasilia. Petrobras expects the project to save it millions of dollars the next 20 years by eliminating transportation by 240 trucks and dozens of railway cars of diesel, gasoline, kerojet, hydrated alcohol, and liquefied petroleum gas. The pipeline's start-up, originally slated for Sept. 30, was delayed over environmental controversy (OGJ, Sept. 9, p. 36).
El Paso Energy Corp. reached preliminary agreement with Tennessee Gas Pipeline Co. customers to settle certain gas supply realignment (GSR) and other transition cost issues arising from Federal Energy Regulatory Commission's Order 636. The agreement hinges on completion of a proposed merger of El Paso and Tenneco Energy, expected by yearend (OGJ, July 1, p. 44). It would cap total GSR costs shared between pipeline and customers at a little less than $1.2 billion; other terms remain confidential until formal settlement is filed with FERC early next year.
FERC approved two pilot programs to test rule changes that the commission proposed earlier this year on capacity release from gas pipelines. Transwestern Pipeline Co., Pacific Gas & Electric Co., and Southern California Gas Co. will operate a pilot program to serve western markets. Columbia Gas Transmission System and Mountaineer Gas Co. will operate a test program in eastern markets.
TransCanada PipeLines Ltd., Calgary, expects a drop in 1997 tolls on its gas pipeline from Alberta to markets in the U.S. and eastern Canada. The decline in tolls will be due in part to a 4-year incentive settlement under which TransCanada and shippers share benefits of reduced operating costs and higher revenue from discretionary service. TransCanada said it is too soon to determine rates, but its Eastern Zone toll could decline to 69¢/Mcf from 86¢/Mcf in 1996.
SPR
U.S. Department of Energy sold another 2.5 million bbl from the West Hackberry Strategic Petroleum Reserve site near Lake Charles, La. It plans to sell $220 million worth of oil, and so far has sold 6.67 million bbl for $142 million. In the latest bid round, Basis Petroleum Inc. bought 1,125,000 bbl, Mobil Oil Corp. 1.3 million bbl, and Fina Oil & Chemical Co. 100,000 bbl at prices of $20.80-21.50/bbl.
Petrochemicals
Thai Petrochemical Industry Public Co. Ltd. (TPI), Bangkok, obtained a $500 million financing package from International Finance Corp., Washington, D.C., for its fully integrated petrochemical expansion project in Rayong province on Thailand's eastern seaboard (OGJ, Oct. 24, 1995, Newsletter). Total project cost is $2.04 billion, with completion set for mid-1998. Project includes a 65,000 b/d condensate and crude splitter; a 360,000 metric ton/year ethylene steam cracker; new and expanded styrene monomer, polystyrene, polypropylene, and acrylonitrile butadiene styrene plants; and crude oil and refined products storage and distribution facilities.
Egyptian General Petroleum Corp. (EGPC) and Phillips Petroleum Co. signed a letter of intent for construction and operation of a 330 million lb/year high density polyethylene plant near Alexandria, Egypt. Phillips would be the plant's majority owner. The plant would use Phillips' proprietary polyethylene technology and feedstock from an ethylene cracker to be built at the same site by a unit of EGPC. Construction is projected to start in 1998, with first output in 2000.
Gas storage
Gas Transmission Corp., (GTC), Victoria, Australia, is studying feasibility of a $100 million (Australian) underground gas storage project. The study, to be completed by yearend, will examine potential for peak load storage in the depleted onshore gas fields of western Victoria's Otway basin. Government-owned GTC holds an option over the four reservoirs, which could be used to meet peak winter shaving needs when demand exceeds capacity in the state's main Bass Strait-linked system.
Drilling-production
Sakhalin Energy Investment Co. Ltd. let a $35 million contract to the Amur Shipbuilding Plant for construction of a steel base, or spacer, required for first phase of development of Piltun-Astokhskoye field off Sakhalin Island in Russia's Far East. The spacer will serve as a support base for an existing mobile drilling unit, Moliqpak. The project is the first Sakhalin offshore development, with first oil targeted for 1999. Sakhalin Energy was established by Marathon Sakhalin Ltd., McDermott Sakhalin Inc., Mitsui Sakhalin Development Co. Ltd., Shell Sakhalin Holdings BV, and Diamond Gas Sakhalin BV to develop Piltun-Astokhskoye and Lunskoye oil and gas fields off Sakhalin.
Enron Oil and Gas Co., Houston, completed purchase of Amoco Production Co.'s Webb County, Tex., Lobo trend properties. The acquisition includes Amoco's producing properties in Atascosa and Kleberg counties. Properties contain estimated proved reserves of 51 bcf of gas equivalent and net production of 25 MMcfd of gas equivalent. The purchase will increase Enron's total South Texas net production to 170 MMcfd from 145 MMcfd. Enron plans additional drilling that will hike net production in the area to 200 MMcfd by yearend.
CXY Energy Offshore Inc., Dallas, completed purchase for $50.2 million of Shell Offshore Inc.'s 100% interest in Vermilion Blocks 302, 321, 339, and 340 off Louisiana. The properties are in about 200 ft of water and currently produce about 29 MMcfd of natural gas and 325 b/d of liquids from 14 wells and four platforms. CXY plans new drilling, workovers of existing wells, and addition of gas compression in 1997.
Ranger Oil Ltd., Calgary, completed a $49 million purchase of four producing fields in the North Sea from Chevron Corp. The company acquired 35% of Chevron interests in Ninian, Hutton, Lyell, and Murchison fields, and the Columba B and E Terraces. Oryx Energy Co. purchased 65% and is currently operator for Hutton, Lyell, and Murchison fields. Oryx also is expected to become operator of Ninian field early in 1997. Ranger will become operator for the Columba B and E Terraces.
Ranger Oil acquired from Mobil North Sea Ltd. a 20% interest and operatorship of U.K. North Sea Blocks 29/2c and 22/26b, in return for Ranger's 75% stake and operatorship of Block 48/22a. Block 29/2c includes Kyle discovery, which has produced on test as much as 4,500 b/d of oil. The company plans to complete appraisal of Kyle in 1997 and is looking to a subsea development tied back to nearby infrastructure, with first oil by 1999. Ranger has a 26.2% interest in Banff field 12 km to the northeast, recently brought on stream under an early production scheme by operator Conoco (U.K.) Ltd. (OGJ, Oct. 14, p. 38).
Pakistan's Economic Coordination Committee directed gas reserves totaling 270 bcf in Miano gas field, Khanpur district, be allocated to Sui Southern Gas Co. Ltd. The gas, found by Hardy Oil & Gas (UK) PPL-Pakistan Oil & Gas Corp. joint venture, will feed diammonium phosphate fertilizer units of Fauji Fertilizer Co. Ltd. and Al Noor Fertilizer Ltd. Deliveries will be made via a 35-km line to be laid to the existing Karachi pipeline.
Gas distribution
Mexico's Energy Regulatory Commission established the U.S.-Mexico border town of Nuevo Laredo as a new natural gas distribution zone and will allow a private company to supply the area. The commission Nov. 18 granted permanent distributor status to Repsol Mexico SA de CV, which had been operating in the area under a provisional permit since last December. An estimated 16,000 customers are in the newly defined zone, a number expected to rise to 22,000 by 2000. The town is served by a 12-in. pipeline operated by Petroleos Mexicanos' gas and basic petrochemicals operating unit.
Power
U.K. Department of Trade & Industry approved a proposal by Powergen plc, London, for a 700-MW combined cycle gas turbine electricity generating station at Killingholme, Lincolnshire. Gas would be provided from Pickerill field, operated by ARCO British Ltd., which already supplies a 900-MW plant on the site. Construction of the plant will depend on power demand.
Safety
U.K. Health & Safety Executive (HSE) reported five deaths, 42 serious injuries, 375 "3-days'-leave" injuries, and 519 dangerous occurrences off the U.K. from Apr. 1, 1995, to Mar. 31, 1996. This compares with one death, 41 serious injuries, 270 3-days'-leave injuries, and 594 dangerous occurrences during the preceding 12 months. The number of U.K. offshore workers for the period was estimated at 29,000.
Gas processing
Marathon Oil Co., Shell Midstream Enterprises, and DeepTech International Inc. unit Leviathan Gas Pipeline Partners LP completed a gas processing agreement with Exxon Co. U.S.A., selecting Exxon's Garden City gas plant in St. Mary Parish, La., as the principal processing complex for gas transported on the proposed Nautilus interstate and Manta Ray gathering pipeline systems serving the central Gulf of Mexico (OGJ, July 15, p. 23). The plant has capacity of about 640 MMcfd. First Nautilus deliveries are expected in November 1997.
Copyright 1996 Oil & Gas Journal. All Rights Reserved.