General Interest — Quick Takes
Industry forms forces to address offshore issues
The US oil and gas industry formed two task forces to address short-term and long-term issues involving offshore equipment and operating practices in the wake of the Gulf of Mexico crude oil spill, the American Petroleum Institute announced.
"This tragic incident requires that we redouble our commitment to continually improve safety and response practices," API Pres. Jack N. Gerard said. "Our industry accepts that challenge. We owe it to the workers who were lost and to the others, particularly along the Gulf Coast, bearing the burden of the accident. We also owe it to the nation that has placed its trust in us to responsibly develop oil and gas off its coasts."
Gerard said the offshore equipment task force will bring together equipment manufacturers, industry subsea equipment specialists, and deepwater contractors to focus on maintenance, response, and testing of blowout prevention equipment and remotely operated vehicles. The offshore operating procedures task force, meanwhile, will use offshore operators and service companies' expertise to strengthen practices related to drilling and completing deepwater wells. API looks forward to government participation on both task forces, Gerard said.
"The ultimate goal of these task forces is to improve safety and environmental performance by learning from any gaps identified from this tragedy," he said. In the very near term, they will bring relevant experts together to identify and further reduce risks of offshore operations, while working in conjunction with SWAT teams that BP PLC is assembling and help ensure that all response efforts are coordinated.
Gerard said in the longer run, the task forces will share lessons learned from investigations of the Deepwater Horizon explosion and fire and subsequent oil spill, and update API operating standards and recommended practices on an ongoing basis.
BLM seeks comments on Colorado development
The US Bureau of Land Management is seeking public comments on Antero Resources Corp.'s proposal to develop natural gas at a site 6 miles south of New Castle in western Colorado.
The Denver independent has proposed drilling as many as 284 wells from 16 pads over 5 years beginning this summer under its North Castle Springs master development plan, according to BLM's Colorado River Valley field office in Silt. The US Department of the Interior agency said it is preparing an environmental assessment.
BLM said Antero also proposed construction of as much as 10.6 miles of new and upgraded access roads and 14.1 miles of new and replacement pipelines. The area proposed for development covers about 6,000 acres of federal land, with primary access provided by Garfield County Roads 311 and 335.
Comments on the proposed development will be accepted through May 31, BLM said.
Parnell wants Alaska to join permit effort
Alaska Gov. Sean Parnell (R) asked that the state be allowed to participate in ConocoPhillips's administrative appeal of a denied permit in the National Petroleum Reserve-Alaska.
The US Army Corps of Engineers denied the permit in early February, saying other technologies should be considered in developing the CD-5 project west of the company's producing Alpine field near Prudhoe Bay.
Parnell said the dispute involves ConocoPhillips's proposal for a vehicle and pipeline bridge across the Colville River's Nigliq Channel, which the Arctic Slope Regional Corp., the North Slope Borough, the Native Village of Nuiqsut, the City of Nuiqsut, and the state strongly support. The Army Corps of Engineers would rather see horizontal direction drilling used instead.
The parties said this approach also poses risks including pipeline corrosion, sedimentation, and slugging, along with other potential problems associated with a buried pipeline in the geo-technically unique and environmentally sensitive Nigliq Channel. A bridge would have fewer potential adverse environmental consequences, they maintained.
Parnell said that under the Corps' regulations, the opinions of the state, both as a permitting agency with jurisdiction and as the Nigliq Channel's property owner, are entitled to deference.
Exploration & Development — Quick Takes
ADMA-OPCO developing Umm Lulu oil field
Abu Dhabi Marine Operating Co. (ADMA-OPCO) is developing another offshore oil field that will produce at least 100,000 b/d at peak.
It has let a front-end engineering and design (FEED) contract to Fluor Corp. for second-phase development of Umm Lulu field about 30 km off Abu Dhabi.
The first phase is an early-production system for 24,000 b/d of oil.
The second phase will push total production to 105,000 b/d. It will involve six wellhead towers, production facilities, living quarters, infield subsea pipelines, and an export pipeline to Zirku Island in the Persian Gulf.
Fluor said the Umm Lulu project ties into ADMA-OPCO's Satah Al Razboot (SARB) development, which will produce 105,000 b/d and for which it also holds a feed contract.
The work covers design of offshore wellhead facilities, subsea and in-field pipelines, and onshore facilities including receiving, processing, storage, and support equipment.
Pioneer pursuing Eagle Ford joint venture
Pioneer Natural Resources Co., Dallas, said it is pursuing a joint venture in the South Texas Eagle Ford shale play and expects to reach agreement by midyear.
The company's latest completion, its fifth successful well in the shale, made an initial 14.1 MMcfd of gas and 255 b/d of condensate with 5,600 psi wellhead flowing pressure on a 24⁄64-in. choke. Gas is 1,200 btu/Mcf.
The Chesnutt Gas Unit-1 in Karnes County had a 12-stage frac in a 4,100-ft lateral at 13,300 ft true vertical depth. Production is to start in this year's third quarter after completion of a Pioneer-operated condensate separation facility.
Pioneer has identified 1,750 potential development locations on its 310,000 acres, 70% of which are in the play's condensate window. It estimated the play's gross resource potential at more than 11 tcf of gas equivalent.
Pioneer has more than 2,000 sq miles of 3D seismic data, logs from more than 150 operated wells, proprietary core samples, and microseismic results.
It has two rigs drilling horizontal wells in Karnes and Dewitt counties and one well awaiting completion. It plans to hike activity to six or seven rigs by yearend, ten rigs by the end of 2011, and 14 rigs by the end of 2012.
Sinochem further developing Colombia's Capella
Sinochem Corp. and Canacol Energy Ltd., Calgary, will spend $42 million in 2010 delineating and developing Capella heavy oil field on the Ombu block in Colombia's Caguan-Putumayo basin.
Aside from developing Capella, in which it holds 10% interest, Canacol plans to explore two adjacent contract areas awarded in 2009 in which it has 100% interest. Total acreage exceeds 1.2 million acres.
Canacol, which discovered Capella in July 2008, has drilled six more successful wells in 2008-09. Shooting 185 sq km of 3D seismic at Ombu started in March.
Romero-A1 well, spud Apr. 28 and projected to Mirador at 3,250 ft, is the first of seven wells Canacol will drill at Capella in 2010. The next well, Capella F-10H, will be the field's first horizontal penetration.
The 2010 work program includes drilling four delineation wells and three development wells, including Romero A1, shooting 3D seismic, starting a steam injection pilot at one well, building a 2,000-b/d early production facility and laying flow lines, upgrading roads and bridges, and drilling a water disposal well.
South Australia strat traps yielding wet gas
Drillsearch Energy Ltd., Sydney, launched an extended production test of the 2008 Brownlow wet gas discovery and plans to similarly test the Canunda wet gas discovery 11 km north of Brownlow in the Cooper basin of South Australia.
After a period at 10 MMcfd with 120 b/d of condensate on a 24/64-in. choke, the choke was opened to 1 in. for a rate of 18 MMcfd from Permian mid-Patchawarra.
The well is in PEL 106, 2 km north of the Middleton wet gas discovery, and 55 km northwest of Moomba, where the condensate will be shipped.
Drillsearch said Brownlow has the potential to be a large stratigraphic trap with three-way dip closure. Beach Energy Ltd., operator of the PEL 106 farmin block with 50% interest, drilled Brownlow as part of farmout obligations now fulfilled.
Drillsearch and Beach hold a large position in a western flank wet gas fairway and have indentified more than 20 prospects on stratigraphic traps that represent a combined best case prospective resource of as much as 200 bcf of sales gas and 8 million bbl of condensate. They plan more drilling as soon as flooding subsides and weather permits.
OMV finds gas at Latif North in Pakistan
OMV AG has made a natural gas discovery with its Latif North-1 well on the Latif exploration license in Pakistan's Sindh province.
The well tested at 44.7 MMscfd of gas from Cretaceous Lower Goru at 3,350 m. It is the best-performing Latif well to date, OMV said.
Latif North-1 is 3 km north of Latif gas field, which is producing a combined 29 MMscfd of gas from the Latif-1 discovery well drilled in 2007 and Latif-2 drilled in 2008. The gas is processed at the OMV-operated Kadanwari processing plant.
Latif North-1 test results indicate a substantial increase of recoverable gas reserves, OMF said. Based on this encouraging result, it said, the field development plan will include the drilling of more wells.
OMV operates more than 525 MMscfd of gas production in Pakistan, of which its net share is 101 MMscfd. It operates Sawan, Miano, Tajjal, and Latif fields and the Sawan and Kadanwari processing plants.
Drilling & Production — Quick Takes
Marathon starts oil flow from Volund tieback
Marathon Oil Corp. has started oil production from Volund field in the North Sea off Norway.
Volund, in Block 24/9, is a subsea tieback to the floating production, storage, and offloading vessel at Alveheim field 8 km north. Volund will ramp up to 10,000 b/d until mid-2010, after which it is guaranteed 25,000 b/d of production capacity on the Alvheim FPSO in PL150.
Volund is expected to reach 25,000 b/d with completion in the third quarter of 2010 of two more producing wells now being drilled.
Marathon is Volund operator with 65% working interest, and Lundin Petroleum AB, Stockholm, has 35%. Marathon also operates Alvheim, in which Lundin's interest is 15%.
Development of the Greater Alvheim area continues with Phase 2 drilling at Alvheim commencing later this year and the likely development of the Marihone and Viper discoveries made in 2009, Lundin said. Objective is to keep the Alvheim FPSO at capacity for the foreseeable future.
BPTT to spend $600 million on gas production
BP Trinidad & Tobago LLC (BPTT) said it will spend $600 million on a project to produce natural gas from its Serrette platform on the northern section of its Columbus basin acreage.
In late April, BPTT's Serrette platform was installed in 278 ft of water off the east coast of Trinidad and Tobago about 51 km north of its Mango development, which is thought to contain more than 3 tcf of gas.
The platform represents the first development in the northern area of BPTT's Columbus basin acreage and is equipped for future development opportunities in the area.
Serrette is the company's 13th offshore production platform and the fifth of its kind, designed and constructed in Trinidad and Tobago.
The Serrette project was sanctioned in May 2009, has a design capacity of 1 bcfd of gas, and will deliver a peak production of 500 MMscfd. The platform will be a normally unmanned installation, much like its predecessors, and will tie into the Cassia B platform via a preinstalled connection at the Mango platform.
Five development wells are expected to be drilled, and the gas will go to BPTT's national grid and LNG operations. Drilling is expected to commence in the fourth quarter, and production is planned for the first quarter of 2011.
Fluor-Summit based in Trinidad was responsible for the engineering design and the platform was built by the Trinidad Offshore Fabricators Co. (TOFCO) in La Brea, Trinidad.
The jacket and topsides were installed by Heerema Marine Contractors' "HLV Balder." The topsides weighed 1,081 tonnes while the jacket weighed 1,943 tonnes.
BPTT is the largest shareholder in Atlantic LNG, which is the largest exporter of LNG to the US.
ConocoPhillips withdraws from Shah project
ConocoPhillips has withdrawn from another large venture in the Middle East, both of which it said were under review when it announced a strategic trimming of its global operations last November (OGJ, Nov. 16, 2009, p. 68).
It said on Apr. 28 that it would pull out of the joint venture it entered last July with Abu Dhabi National Oil Co. to develop sour gas reserves in giant Shah field 180 km southwest of Abu Dhabi City.
Earlier, it withdrew from a project with Saudi Aramco to build a 400,000-b/d export refinery at Yanbu, Saudi Arabia (OGJ Online, Apr. 21, 2010).
In the Shah project, ConocoPhillips, 40%, and ADNOC, 60%, formed a company to drill 20 wells and build infrastructure for production of about 1 bscfd of raw gas yielding 1.6 million tonnes/year of NGL, 30,000-40,000 b/d of condesnate, 3.4 million tonnes/year of sulfur, and 500-600 MMscfd of dry gas. Costs were estimated as high as $10 billion (OGJ, Nov. 16, 2009, p. 33).
The dry gas was to be used in domestic markets or reinjection.
"The Shah gas field will be a world-class project that will develop a key resource for Abu Dhabi and the region, and it was a difficult decision not to participate in a project of this importance," said Ryan Lance, ConocoPhillips senior vice-president, exploration and production international. "We value our relationship with ADNOC and will continue to look for opportunities to work together in the future."
Processing — Quick Takes
Abu Dhabi Gas awards another Shah contract
Abu Dhabi Gas Development Co. Ltd. awarded a $1.5 billion engineering, procurement, construction, and precommissioning contract to Samsung Engineering, Seoul, for the gas complex in the 1-bcfd Shah sour-gas development about 112 miles southwest of Abu Dhabi. Completion targets August 2013.
Abu Dhabi Gas Development also selected Samsung Engineering as interface manager and coordinator of the overall $10 billion Shah gas project.
Earlier this week, ConocoPhillips, which held a 40% interest in the project, announced it was withdrawing from the Shah project (OGJ Online, Apr. 28, 2010).
The project will develop onshore sour gas and condensate reservoirs whose first discovery was in 1966.
Original reserves reach 500-600 million bbl of 30° gravity oil in Cretaceous carbonates at 8,000 ft. The gas-condensate is in the deeper Jurassic Arab formation (OGJ Online, July 10, 2009; OGJ, Aug. 18, 2008, p. 44).
Abu Dhabi Gas Development is one of 15 companies under the aegis of Abu Dhabi National Oil Co. They cover from exploration, production, refining, and gas to petrochemicals.
Mideast ethane cracker starts up
Qatar Petroleum has started up a new ethane cracker at its Ras Laffan industrial site. It will feed the new Qatofin polyethylene plant at Mesaieed that started up in November 2009.
According to Total SA, QP's 22.2% partner in the venture through Total Petrochemicals, the Ras Laffan olefin cracker is the largest based on ethane in the world and can produce 1.3 million tons/year of ethylene. Also a partner in the project is Chevron Phillips Chemical Co.
Feed for the cracker comes from raw natural gas produced from North field. Produced methane feeds the large LNG plants at Ras Laffan; the separated ethane then flows to the new cracker.
Total holds interests in North field through the Dolphin and Qatargas I and II projects, according to the company.
Petrobras to sell refinery in Argentina
Petrobras Energia SA has approved terms of the sale of its small refinery in San Lorenzo, Argentina, to Oil Combustibles SA in a transaction valued at $110 million.
The refinery has 37,600 b/d of crude capacity, 16,000 b/d of vacuum distillation, and 3,500 b/d of thermal capacity.
The deal covers the refinery, a river unit, and a marketing network including 360 service stations. The reported offer includes $36 million for the physical assets and about $74 million in inventories.
Transportation — Quick Takes
Oregon LNG project leaves the field
NorthernStar Natural Gas, Houston, announced May 4 it was suspending development of its Bradwood Landing LNG terminal near Astoria, Ore.
The terminal was to have sent up to 1.3 bcfd into Northwest US markets and was one of three LNG projects proposed for Oregon. Also part of the project was a 36.3-mile pipeline.
In a company announcement, NorthernStar Pres. Paul Soanes cited extended delays in the processing of state and federal permits and the "difficult investment environment." He said, "[The] challenging regulatory environment," in particular, "gives investors pause."
Development work on Bradwood Landing began nearly 6 years ago on the site of the former Bradwood lumber mill with a natural deepwater port on the Columbia River in Clatsop County. The US Coast Guard determined the Columbia River could be made suitable for LNG marine traffic in its decision of Apr. 24, 2009.
The project received approval from the US Federal Energy Regulatory Commission in September 2008 after 3½ years of "scientific and technical review," the company said. On Mar. 20, 2008, the Clatsop County Board of Commissioners approved Bradwood's consolidated land-use application.
Bradwood Landing's departure from the LNG terminal scene in Oregon leaves two other projects facing the same head winds of public opposition.
Oregon LNG would build and operate a terminal with berthing and three full-containment, 160,000-cu m tanks on the Skipanon Peninsula in Warrenton, Ore. With completion targeting early 2013, the terminal will operate as a tolling facility. Oregon Pipeline, an affiliate, plans a 120-mile pipeline connected to a hub in Molalla, Ore.
Jordan Cove Energy Project would build a terminal on an undeveloped site within the Oregon International Port of Coos Bay that would have normal sendout of 1 bcfd and peak of 1.2 bcfd. Also on site would be storage capacity in two, 160,000-cu m full-containment tanks and NGL recovery capability.
SOCAR to double capacity at Kulevi port
State Oil Co. of the Azerbaijan Republic (SOCAR) will begin a major expansion of its oil export terminal at Kulevi on Georgia's Black Sea coastline, according to a senior executive of the firm.
The expansion is aimed at doubling the port's throughput capacity from the current 10 million tonnes/year to 20 million tpy, possibly by yearend 2011, according to Ilham Nasirov, the managing director for SOCAR of BTC-Azerbaijan.
Nasirov told a conference in Aktau, Kazakhstan's port city on the Caspian Sea, that the expansion includes a single-point mooring buoy to handle tankers as large as 120,000 dwt, new offshore pipelines, a pump station, a control room, and expansion of rail capacity.
Nazirov's announcement follows a report in November 2009 that SOCAR, after increasing the existing capacity for tankers, may begin shipping oil from its export terminal at Kulevi on Georgia's Black Sea coast in 2010.
"Tests are under way now and Kulevi terminal will be able to ship more than 80,000 tonnes of oil in each shipment on large tankers, beginning with crude from Tengiz oil field in Kazakhstan," according to one SOCAR official (OGJ, Nov. 24, 2009).
Nasirov's announcement also follows reports last month that Kulevi Seaport inaugurated negotiations with Chevron Corp. about handling the oil it produces in Kazakhstan.
"We are conducting intense negotiations with Chevron," said Jani Katamadze, manager of Kulevi Seaport. "If the negotiations end positively, Kazakh oil will be transported through the Kulevi oil terminal," said Katamadze, who declined to speculate on the amount of Chevron oil his port might handle.
However, Vagif Aliyev, the head of the SOCAR investment management department and chairman of the Cross Caspian's board, said in February that an oil trans-shipment contract had been signed by TengizChevroil and Cross Caspian.
Aliyev said the contract was for oil transportation through Georgia's ports of Batumi and Kulevi. At the time, Aliyev indicated that Kulevi would carry 4-5 million tpy of Chevron oil.
Yamal LNG awards concept contract
Yamal LNG LLC has awarded a contract to CB&I Lummus for concept development services for the Yamal LNG integrated project to be completed in first-half 2011.
The project consists of the production, treatment, transportation, liquefaction, and shipping of natural gas and NGLs from South Tambey field on the Yamal Peninsula in northwestern Siberia. Reserves in South Tambey field are estimated at more than 1 trillion cu m (35.3 tcf).
CB&I's project scope includes concept development of the 15-16 million tonne/year LNG liquefaction plant, including LNG storage and loading, as well as arctic shipping and ice management, a gas transmission pipeline, central production for gas and condensate treatment, and associated well sites and gas gathering, said the announcement.
Correction In the article "BLM issues final EIS for Utah-Nevada line" (OGJ, May 3, 2010, Newsletter, p. 12), the 75% interest in the pipeline project is owned by Holly Corp. not Holly Energy Partners. Holly owns 34% of Holly Energy Partners, not the 45% noted. Also, while the start-up capacity of the line is 62,000 b/d, the anticipated start-up volume is expected to be about 30,000 b/d. |
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