Industry Briefs

Feb. 14, 2000
A Feb. 4 accident at Formosa Plastics Group's Mailiao naphtha cracking complex killed three Indonesian workers employed by a South Korean subcontractor. The men asphyxiated on argon and hydrogen gas, which leaked from pipes they were installing at an aromatics plant being built at the complex.

Petrochemicals

A Feb. 4 accident
at Formosa Plastics Group's Mailiao naphtha cracking complex killed three Indonesian workers employed by a South Korean subcontractor. The men asphyxiated on argon and hydrogen gas, which leaked from pipes they were installing at an aromatics plant being built at the complex.

Bayer AG
let contract to Krupp Uhde GMBH for the engineering, procurement, civil works, construction, supervision, and commissioning of a 548,000 tonne/year nitric acid plant being built for EC Erd

Oilsands

Shell Canada Ltd.
let a $20 million contract to Flowserve Corp., Dallas, to supply more than 200 API-engineered and ANSI-process pumps for its $3.8 billion (Can.) Athabasca oilsands project in northern Alberta (OGJ, Aug. 23, 1999, p. 43). Delivery of the pumps will coincide with the initial production from the project, which is expected in late 2002. Partners in the project include Shell 60%, Chevron Canada Resources Ltd. 20%, and Western Oil Sands LP 20%.

Companies

Newfield Exploration Co.,
Houston, will acquire interests in South Texas producing natural gas assets from an undisclosed seller for $142 million. They consist of three producing fields-in Hidalgo, Brooks, and Kenedy counties-and produce 75 MMcfd of gas, 35 MMcfd net to Newfield. The company will operate two of the three fields and intends to drill several locations on the acquired acreage in 2000.

Spars International Inc.,
a joint venture of J. Ray McDermott SA, and Aker Maritime-both based in Houston-was amicably dissolved by both partners. Spars International was formed to provide spar technology for global deepwater field development projects (OGJ, Sept. 18, 1995, p. 43). The JV licensed spar technology under an agreement with Deep Oil Technology Inc., Houston. Following the dissolution, the two firms will be able to acquire all outstanding stock in Deep Oil. The JV was ended, says McDermott, "to better meet market demands and improve the current business structure for development and delivery of spar solutions." Both firms will continue to market their spar technologies separately.

Oneok Inc.,
Tulsa, will acquire certain natural gas gathering and processing businesses, a marketing and trading business, and certain storage and transmission pipelines from Kinder Morgan Inc., Houston, for about $114 million. The gas gathering lines are in Oklahoma, Kansas, and West Texas. Involved are more than 12,000 miles of pipeline, six gas processing plants with 1.26 bcfd of total inlet capacity, and 10.5 bcf of gas storage capacity. In addition, Oneok will take on operatorship of the Bushton, Kan., gas processing plant and will be held to long-term capacity contracts on both the Natural Gas Pipeline Co. of America and Kinder Morgan Interstate Gas Transmission systems.

Arc Energy Trust,
Calgary, acquired oil and gas assets in Alberta and Saskatchewan from an undisclosed seller for $135 million (Can.). Arc said the deal, which includes 2 large and 11 small properties, will add 5,000 boe/d to its existing 18,500 boe/d of production. The acquired assets are about 89% oil.

Pipelines

Enron North America Corp.
was released from its contract for 1.2 bcfd of firm interstate capacity on El Paso Natural Gas Co.'s system (OGJ, Jan. 3, 2000, p. 31). "It is unfortunate that the recent [Federal Energy Regulatory Commission] order modified the capacity rights in a way that will not allow the capacity to serve the purpose that Enron North America originally intendedellipse," said El Paso Energy Pipeline Group Pres. John W. Somerhalder II. Enron declined to comment on its release from the contract. El Paso has subsequently resubscribed this capacity through an open season, which began Feb. 7.

Gaz Metropolitain Co.,
Montreal, plans to purchase natural gas from the Sable Island region off Nova Scotia to diversify its supply sources. The company plans to build a $400 million (Can.) pipeline connecting the Maritimes & Northeast Pipeline, near Fredericton, NB, to Quebec City. Gaz Metropolitain-controlled by Hydro Quebec in partnership with Enbridge Inc., Calgary, and Gaz de France-currently obtains supplies from Alberta.

Caspian Pipeline Consortium
(CPC) let two contracts valued at a combined $2.4 million to IDS Engineering Inc., a unit of Industrial Data Systems Corp., Houston, for assembly and programming of computer control systems for five pump stations for CPC's Caspian oil export pipeline project. CPC began laying pipe for the new 480,000 b/d oil pipeline late last year (OGJ, Nov. 29, 1999, p. 29); the pipeline is expected to reach completion in October 2001.

Abu Dhabi Gas Co.
let a multimillion-dollar contract to National Petroleum Construction Co. (NPCC), Abu Dhabi, for the onshore Maqta-Jebel A* gas pipeline project. NPCC will undertake design, engineering, procurement, supply, and laying of a 112-km, 48-in. pipeline from Maqta, Abu Dhabi, to Jebel-Ali, Dubai, via Taweelah, including intermediate valve and terminal stations. Project completion is set for March 2001.

Calpine Corp.,
San Jose, Calif., acquired 100% of the stock of Western Gas Resources-California Inc. (WGRC)-a unit of Western Gas Resources Inc., Denver-for $14.9 million. WGRC's assets included the 130-mile Steelhead natural gas pipeline and remaining interest in the Sacramento River Gas System gas pipeline. The acquisition will double Calpine's deliverable capacity to existing and future power plants in the region. Existing plants include Greenleaf 1 and 2 in Sutter County, Calif., and a facility at the Dow Chemical complex in Pittsburgh, Calif.

Gas supply

Centrica PLC
renegotiated a take-or-pay contact with Shell UK Ltd. for natural gas supplies from Galleon field in the southern North Sea. In return for payment to Shell equal to 1% of Centrica's gross assets, gas prices on 540 million cu m will be reduced to market levels for Centrica. Since December 1996, Centrica has received reduced price and volume commitments on 18.9 billion cu m, it said.

Exploration

Kerr-McGee Oil & Gas Corp.,
a unit of Kerr-McGee Corp., Oklahoma City, made an oil discovery and drilled two successful appraisal wells on the Leadon prospect on Blocks 9/14a and 9/14b in the UK North Sea. The well, drilled to 5,462 ft, cut 145 ft of net pay. The first appraisal well, about 1,400 ft north of the discovery well, cut 130 ft of net pay, while the second well cut 150 ft of net pay at 1,900 ft. Reserves held in Leadon-which lies 15 miles north of Kerr-McGee's Gryphon field operations-are estimated at 70-100 million boe.

Elf Aquitaine SA
signed a technical evaluation agreement with Mozambique's state-owned Empresa Nacional de Hidrocarbonetos for the deep Mozambique channel off the Zambezi River delta. Elf will perform seismic and geophysics synthesis studies on the unexplored area, which lies in 1,800-3,000 m of water.

Apache Corp.,
Houston, made two discoveries on its West Mediterranean and East Bahariya concessions in Egypt. On test, the Akik-1X well flowed 23.4 MMcfd of natural gas and 1,685 b/d of condensate through a 48/64-in. choke with 2,275 psi flowing wellhead pressure. The well found pay at 8,112-8,160 ft in upper Alamein dolomite; Apache says it will continue drilling to 10,600 ft TD to test zones in the Alam el Bueib. Apache operates West Mediterranean, holding a two-thirds interest; Spain's Repsol-YPF SA holds the remaining third. The second well, Karama-1X, was drilled on East Bahariya and flowed 1,520 b/d of 43° gravity oil and 500 Mcfd of gas through a 1-in. choke from Abu Roash at 7,552-7,570 ft in. Operator Repsol and Apache hold equal interests in the concession.

Chevron Corp.
unit Chevron Congo acquired a 15% interest from Elf Congo in the Mer Profonde Sud (MPS) deepwater exploration area off the Republic of Congo (see map, OGJ, June 23, 1997, p. 25). The 1,300 sq mile block is about 50 miles off Congo in 3,300-6,600 ft of water. The area lies next to Angola's (Cabinda) deepwater Chevron-operated Block 14-which holds several giant oil fields (see map, p. 22)-and the Congo's Haute Mer permit. Elf, while retaining a 25% interest in MPS, will continue to operate the block. Other MPS partners are ExxonMobil Corp., 30%; Shell Congo, 15%; and TotalFina SA, 15%.

Remington Oil & Gas Corp.,
Dallas, completed drilling operations on its new fault block discovery on South Pass Block 87 in the Gulf of Mexico. The OCS-G 7799 D-11 sidetrack logged 107 ft of net gas pay in two sands and flowed on test 16.1 MMcfd of gas and 485 b/d of oil through a 16/64-in. choke from the lowest sand package. Full production is expected to start after minor platform modifications. Remington holds a 50% interest in the sidetrack.

Unocal Ganal Ltd.,
a unit of Unocal Corp., found gas on the deepwater Gendalo prospect in the southern portion of the Ganal production-sharing contract area off East Kalimantan. The Gendalo-1 well-drilled to 15,000 ft TD in 4,677 ft of water-cut 242 ft of net gas pay in two Miocene intervals. The first zone held 144 ft of net pay over a 230-ft interval; the second, 73 ft of net gas pay over a 584-ft interval. Unocal estimates the Gendalo prospect's "gross unrisked resource potential" at 1-3 tcf of gas.

Refining

Metro Oil Corp.,
Fujairah, will restart operations at its 75,000 b/d Fujairah refinery following the signing of a $150 million deal to settle debts with foreign and local creditors. Also, a new firm called Fujairah Refinery Co. was established to assist in relaunching production. Metro had run into financial difficulties in the wake of bunker fuel price fluctuations, which caused the subsequent failure of sister concern Metro Bunkering & Trading. Metro plans to increase the refinery's capacity to 90,000 b/d and to continue diversifying refined products to include kerosine and jet fuel.

Drilling-production

Chevron unit
Cabinda Gulf Oil Co. (CABGOC) completed two appraisal wells in the Benguela and Belize oil fields on Block 14 off Angola. On test through restrictive chokes, Benguela 2A well flowed 8,400 b/d of both 24° and 34° gravity oil, while Belize 2A well flowed 11,000 b/d of 36° gravity oil. Both wells flowed from Miocene sands. These are the second appraisal wells for each field subsequent to their discovery. Both fields are about 4 km south of Kuito field, also operated by CABGOC and expected to reach peak production of 100,000 b/d of oil (see map, p. 22). Interest holders in Block 14 are CABGOC, 31%; Angolan state oil firm Sonangol, ENI unit Agip Angola, and TotalFina Angola Ltd., 20% each; and Portuguese state oil firm Petrogal, 9%.

Burlington Resources Inc.
(BR) unit Burlington Resources Algeria Ltd., Algeria state oil firm Sonatrach, and Talisman Energy Inc. unit Talisman (Algeria) BV announced successful test results from the MLSE-3 appraisal well on Menzel Lejmat Block 405a in Algeria's Berkine basin. The well flowed at a combined rate of 21,857 b/d of 41.5° gravity oil and 26.2 MMcfd of natural gas from three TAG-I intervals through a 106/64-in. choke with 1,112 psi flowing wellhead pressure. Operator BR holds a 65% interest in the well under a production-sharing agreement with Sonatrach. Talisman holds the remaining 35%.

Hyundai Heavy Industries
let contract to Kvaerner Oilfield Products, London, to supply subsea controls systems for Conoco Inc.'s West Natuna Sea gas development off Indonesia. The contract includes the supply of additional direct hydraulic systems to control 12 subsea gas wells to be tied back to Conoco's Belida platform. The platforms lie in 82 m of water.

LPG

Ottawa's Federal Competition Tribunal
is expected to rule in April or May on an acquisition involving two major Canadian propane companies, Superior Propane Inc. and ICG Propane Inc., both of Calgary. Superior has been running the companies as separate operations pending the ruling. The tribunal will rule whether Superior must divest all or part of ICG-a unit of Petro-Canada that it acquired in 1999 for $175 million (Can.)-despite objections from Ottawa's competition bureau. The bureau argues the deal would give Superior 70% of the propane distribution market and complete control in some areas. Closing arguments are expected to be completed within a week.

Cogeneration

AES Corp. unit CILCO,
Peoria, Ill., and Caterpillar Inc. plan to construct a $51 million, 45-Mw cogeneration plant in Mossville, Ill. The new plant, dubbed AES Medina Valley, will be owned and operated by a subsidiary of CILCORP and will supply electricity, steam heat, and chilled water service to Caterpillar's Mossville performance engine products division plant. The plant will also supply electricity to Caterpillar's Mapleton foundry. Construction of the plant will begin in April, with completion set for June 2001. The plant will have capacity to produce 410,000 lb/hr of steam and 7,200 tonnes of cooling capacity.