GENERAL INTEREST Quick Takes
Industry forms Global Natural Gas Coalition
More than a dozen US companies and organizations have formed the Global Natural Gas Coalition, which will work to promote the benefits of gas as a foundation for economic growth and prosperity worldwide. Officials from LNG Allies and other participating groups launched the effort on June 25.
“The world is in the midst of a fundamental energy transformation where natural gas will be the foundational fuel for economic prosperity throughout the world,” said Dennis V. Arriola, chief strategy officer and executive vice-president for Sempra Energy and the GNGC’s founding member.
“Our coalition brought together groups and individuals to show our strength and provide a voice for natural gas and the many benefits it provides,” Arriola said.
“With natural gas leading the way, the energy revolution in America has created millions of jobs and billions in economic growth while also increasing our geopolitical standing and reducing air emissions,” said Karen A. Harbert, president of the US Chamber of Commerce’s Global Energy Institute.
Organized labor also is on board. “The Laborer’s International Union of North America’s half-million members—who have worked more than 80 million hr in the pipeline industry in the last 5 years—are proud to join the [GNGC] to promote the use of gas as a safe and affordable fuel to meet the world’s energy needs,” said LIUNA Executive Director Yvette Pena-O’Sullivan.
Officials said that members also include other organizations supporting manufacturing, utilities, pipelines, and LNG; individual companies; academic institutions; trade and labor groups; and others with the common goal to create a unified voice advocating and promoting gas’s use as a foundational fuel for global economic prosperity.
Pa. permits include methane-recovery requirement
Pennsylvania Gov. Tom Wolf (D) and Department of Environmental Protection Sec. Patrick McDonnell jointly announced new general permits for unconventional natural gas wells and compression, processing, and transmission facilities that they said will reduce air pollution and establish a methane emissions control threshold.
The permits, which go into effect on Aug. 8, represent a win-win outcome because they will help Pennsylvania’s gas industry control methane emissions that cost producers, pipelines, and utilities money, while helping make communities healthier with cleaner air, Wolf said.
As the nation’s second-biggest gas producer behind Texas, Pennsylvania is in a unique position to lead the US addressing climate change while supporting and ensuring responsible energy development, and protecting public health and the environment, Wolf said.
McDonnell said the newly revised general permits, Final GP-5 and Final GP-5A, will be required for new compression, processing, and transmission stations along pipelines, and new gas wells, respectively.
“The permits for new unconventional gas wells and new compression, processing and transmission stations along pipelines are some of the first in the nation to comprehensively address methane emissions from all equipment and processes. They also address other types of air pollution that contribute to poor air quality,” the PDEP secretary said.
The permits also set thresholds on other types of air pollution, such as volatile organic compounds, hazardous air pollutants, and nitrogen oxides, McDonnell said. Operators will be required to meet federal new source standards and state best available technology requirements included in the permit conditions for equipment and processes to control emissions, he said.
Denson named Hunter Oil chief executive
Al H. Denson has been named chief executive officer of Hunter Oil Corp., Vancouver, BC.
A Hunter director and member of the operating committee since 2014, Denson succeeds Andrew Hromyk, who becomes executive chairman. Denson worked for 20 years with the former Amoco Corp.
Exploration & DevelopmentQuick Takes
BLM issues final EIS for major Wyo. gas project
The US Bureau of Land Management issued a final environmental impact statement for the proposed Normally Pressured Lance natural gas development project in Wyoming. The June 21 action came about 30 days before a final decision was reached on the project, which would be south and west of Jonah field in Sublette County.
Jonah Energy LLC intends to drill 3,500 wells over 10 years on 141,000 acres of public, state, and private lands, 96% of which is on BLM-managed land within its High Desert District, BLM’s Washington headquarters said.
If approved, the NPL Project could unlock as much as 7 tcf of gas, create 950 jobs during the development phase, and generate $17.85 billion in total project revenue with federal royalties amounting to $2.2 billion, of which $1.1 billion would go to Wyoming state, BLM said.
SDX reports another Egyptian gas strike
SDX Energy Inc., London, will complete for production another natural gas discovery on its South Disouq concession in Egypt (OGJ Online, May 22, 2018).
The SD-4X well encountered 89 ft of net gas pay with average porosity of 24% in the Upper Miocene Abu Madi formation. The reservoir quality is like that of the SD-1X discovery in a thicker pay section.
The well will be tested after being completed as a producer. The rig then will drill the SD-3X well, the second of two appraisal wells planned this year.
Oil Search’s Kimu appraisal successful
Oil Search Ltd., Port Moresby and Sydney, has reported a successful appraisal of the Kimu gas discovery in the forelands of Papua New Guinea.
Kimu-2, drilled in retention license PRL 8, showed similar reservoir properties to the Kimu-1 discovery with the bonus of slightly thicker reservoir (OGJ Online, May 22, 2017).
The company said the well objective was to test the potential resource upside in the field and assist in selecting the optimal commercialization pathway.
Kimu-2 found gas in the target Cretaceous-age Alene reservoir. Provisional interpretation also noted that the reservoir appears to be in pressure communication with the discovery well.
Cores and logs were acquired and a drillstem test undertaken resulting in a measured continuous flow rate of 34.5 MMcfd of gas during a 72-hr test period through a 1-in. choke.
Kimu-2 will now be plugged as planned. Evaluation of the well data has already begun.
Kimu field was discovered by Oil Search in 1999. Additional seismic data were acquired in 2016 that indicated the potential for a field extension to the west. Consequently, Kimu-2 was drilled 3.8 km west of Kimu-1.
Congo (Brazzaville) advances licensing
Congo (Brazzaville) has opened registration for the second phase of licensing of 18 open blocks, including five in shallow water, five in deep and ultradeep water, and eight onshore. The Ministry of Hydrocarbons is taking registrations and in September will open the call for tender, which will close next June.
Offered in the onshore Cuvette basin are blocks designated Koga, Mbesse, Mboloko, Mboto, and Ntsinga. Onshore Coastal basin blocks are Conkouati, Nanga III, and Niambi. Shallow-water blocks are Marine XXV, Marine XXVI, Marine XXIX A/B, Marine XXXI A/B, and Youbi. Deep and ultradeepwater blocks are Marine XIX, Marine XXII, Marine XXIII, Marine XXIV, and Marine XXX.
PGS has shot seismic surveys over the blocks and is assisting the ministry.
Drilling & ProductionQuick Takes
Chevron lets contracts for Gorgon subsea equipment
Chevron Australia Pty. Ltd. has let contracts to Baker Hughes to supply subsea production equipment under a 15-year master service order (MSO), with a second contract for well completion equipment for a second development phase within the Greater Gorgon area offshore Australia, helping to maintain gas supply to the downstream LNG plant.
The Greater Gorgon area lies 130-220 km off northwestern Western Australia. Previously, BHGE delivered gas turbines and subsea production systems for the first phase of the project, in addition to pipeline precommissioning services.
The subsea contract includes 13 subsea production trees, two eight-slot manifolds, 13 fatigue-resistant wellheads, specialty connectors and pipes systems along with 16 subsea control systems and associated equipment.
Baker Hughes also will supply well completion equipment and services under a separate 5-year contract, including coring work, liner hangers, completions and wellbore cleanup technology.
“These latest contracts are a clear sign of Baker Hughes’ continued gas technology leadership, and ability to compete and win big projects,” said Graham Gillies, vice-president of Baker Hughes subsea production systems and services. “We will continue to keep a sharp eye on these important, long-cycle offshore developments with a view to providing leading technology,” along with equipment and services.
The Chevron-operated Gorgon project shipped its first LNG cargo from Barrow Island in March 2016.
ConocoPhillips lets contracts for Barossa development
ConocoPhillips has awarded three engineering contracts for front-end engineering and design work for the Barossa gas-condensate development project in the eastern Timor Sea about 300 km north of Darwin.
ConocoPhillips has introduced competition into the process for this, the first stage of the Barossa-Caldita proposal that gained approval from the Australian offshore regulator NOPSEMA in March.
Japan’s Mitsui Ocean Development & Engineering Co. was let a contract to help design the floating production, storage, and offloading vessel, while the UK’s TechnipFMC and South Korea’s Samsung Heavy Industries were let design contracts for the same vessel.
The vessel will produce from six subsea wells.
ConocoPhillips said it will choose the FPSO design from these two after it has made a final investment decision for the project at yearend 2019.
The third contract was let to INTECSEA, a subsidiary of WorleyParsons, to design subsea infrastructure and a new 260-290km undersea pipeline to run from Barossa field to the existing ConocoPhillips-operated Bayu Undan-Darwin pipeline.
The Barossa-Caldita project is expected to produce 3.7 million tonnes/year of LNG through the Darwin LNG plant, along with 1.5 million bbl/year of condensate when it comes on stream.
ConocoPhillips also operates the Darwin LNG plant for co-venturers Santos, Inpex, Eni SPA, Tokyo Gas, and JERA.
Vaalco returns Avouma 2H well to production off Gabon
Vaalco Energy Inc. has completed workover operations and replaced an electrical submersible pump (ESP) on the Avouma 2H well offshore Gabon on Block P. The well is producing at higher rates than before it was shut down.
A floating production, storage, and offloading vessel is used for production on the Etame Marin block, which includes Southeast Etame and North Tchibala fields.
Cary Bounds, Vaalco chief executive officer, said the company also is considering development drilling offshore Gabon in 2019. Earlier this year, Vaalco of Houston paid off its debt.
Vaalco expects Avouma 2H well production will stabilize at about 2,000 b/d gross or 540 b/d net. Workover operations began on the Avouma platform on May 17 to replace ESPs in the Avouma 2-H and South Tchibala 1-HB wells.
Executives estimate net production of 750 b/d could be restored if both workovers are successful. In addition, Vaalco started a third workover to upgrade the ESP in the South Tchibala 2H well while the hydraulic workover unit remains on the platform.
Executives seek to mitigate the potential for premature ESP failure through design enhancements to extend pump life. The primary ESP initially failed in the Avouma 2-H well 2 years ago.
Equinor lets well services contract for NCS
Equinor ASA has let an integrated well services contract to Baker Hughes for the 8 rigs developing Troll, Oseberg, and Grane fields in the Norwegian Continental Shelf. The agreement will cover 4 years with options to extend by as long as 10 years.
Products and services will include integrated drilling services, drill bits, cementing and pumping, drilling and completion fluids, electrical wireline logging, and completions. Baker Hughes also will provide upper completions and mechanical well washing services for three other fields.
Currently, Baker Hughes provides well services on Equinor’s Johan Sverdrup field as well as the Askepott rig.
PROCESSINGQuick Takes
Mongolia breaks ground on country’s first refinery
Mongolia’s government has started construction of the country’s first refinery on 150 hectares in Altanshiree Soum in the southeastern province of Dornogovi.
Rajnath Singh, India’s minister for home affairs, attended the groundbreaking ceremony for the refinery on June 22 in Altanshiree, according to posts from Singh’s official social media accounts.
Supported by a $1-billion soft credit line to Mongolia from India announced in May 2015, the new facility comes as part of India’s effort to develop further ties with the landlocked country and help reduce its energy dependence on neighboring China and Russia (OGJ Online, Jan. 26, 2018).
Alongside building the refinery, state-owned enterprises and organizations also will work on construction of an electric power transmission line as well as 20 km of railway and roadway to connect the manufacturing site to nearby Sainshand.
Engineers India Ltd. has been selected to deliver the detailed project report for construction of the refinery, which will be operated by a public company and could boost Mongolia’s gross domestic product by 10%.
Designed to process Mongolia’s own shale crude production currently exported to China, the proposed 1.5 million-tonne/year refinery will produce 560,000 tpy of gasoline, 670,000 tpy of diesel, and 107,000 tpy of liquefied gas for domestic use, helping to reduce finished petroleum product imports from Russia.
Alberta bitumen refinery wraps construction
North West Redwater Partnership (NWRP) has completed construction of the first 80,000-b/d phase of its proposed three-phased greenfield bitumen refinery in Sturgeon County, about 45 km northeast of Edmonton, Alta. (OGJ Online, Jan. 28, 2010).
With construction on the last of the refinery’s ten major units fully wrapped in May, operator North West Refining Inc. (NWR) is progressing with the staggered commissioning of all remaining units at the site as it prepares to switch over from synthetic crude to bitumen feedstock for production of low-sulfur diesel in the coming months, the operator said.
The refinery used partially upgraded synthetic crude feedstock as part of the commissioning and startup process for the majority of its previously completed units, which have been producing diesel since December 2017 (OGJ Online, Dec. 19, 2017).
Once all three 80,000-b/d phases of the refinery are commissioned, the Sturgeon refinery will process 240,000 b/d of Canadian bitumen feedstock to produce ultralow-sulfur diesel, diluent, and other bitumen products for both domestic and global markets.
NWRP is a joint venture of NWR (formerly North West Upgrading Inc.), Calgary. Canadian Natural Upgrading Ltd., a wholly owned subsidiary of Canadian Natural Resources Ltd., is also of Calgary.
Chinese refiner lets contract for PP plant
Shandong Wonfull Petrochemical Co. Ltd. has let a contract to Honeywell UOP LLC to license its proprietary C3 Oleflex propane dehydrogenation technology for a propylene plant at its 5.8 million-tonne/year integrated refining and petrochemical complex in Huantai Economic Development Zone in China’s Shandong Province.
Alongside technology licensing, Honeywell UOP will provide the process design package, proprietary and nonproprietary equipment, on-site operator training, technical services for startup and continuing operation, as well as catalysts and adsorbents for the project, the service provider said.
Once completed, the plant will be able to produce 250,000 tpy of polymer-grade propylene.
Honeywell UOP disclosed neither a value of the contract nor a timeframe for commissioning of the project.
One of China’s officially licensed independent refiners, Wonfull Petrochemical, produces low-sulfur gasoline, diesel, LPG, petroleum coke, sulfur, propylene, and other petrochemicals.
SABIC lets contract for UK petchem plant
Saudi Arabia Basic Industries Corp. (SABIC) has let a contract to John Wood Group PLC, Aberdeen, to provide industrial services for the Olefins 6 plant at subsidiary SABIC UK Petrochemicals Ltd.’s Teesside petrochemicals complex in Wilton, UK.
Effective immediately, Wood will provide rope access, scaffolding, insulation, and coatings services to support pipework and vessel inspections at the site, the service provider said.
This latest contract follows Wood’s more than 10 years of previous contracts for delivery of engineering, procurement, and construction management services at the Olefins 6 plant, Wood Group said.
Wood Group disclosed neither a value of the contract nor any additional details regarding its scope of work under the agreement.
Purchased from Huntsman Petrochemicals (UK) Ltd. in 2007, the Teeside complex produces ethylene from an originally 865,000-tonne/year naphtha cracker that SABIC plans to modify into a gas cracker based on low-cost ethane feedstock to be imported from the US (OGJ Online, Aug. 18, 2018; Sept. 28, 2006).
In its 2017 board of directors’ report, SABIC said it completed the first phase of the gas cracking plant project in 2016, which included development of the site’s existing plant with the first ethane-cracking process as well as construction of a new reservoir dedicated to receiving ethane from gas tankers and all logistic installations for unloading.
While the project was designed to increase production by nearly 250,000 tpy, with improved design and operation, the production capacity could be increased to more than 300,000 tpy, according to the report.
Still under design and subject to cost calculation, the project’s second phase will focus on expanding the plant to reach a production capacity of 600,000 tpy.
TRANSPORTATIONQuick Takes
Nord Stream 2 completes Swedish permitting
Nord Stream 2 natural gas pipeline received the permit for construction and operation in the Swedish Exclusive Economic Zone (EEZ). Sweden’s Ministry of Enterprise and Innovation issued the permit for the roughly 510-km section within the Swedish EEZ.
Seabed intervention works, such as the construction of rock berms and concrete mattresses for cable crossings, will begin in months, while pipelaying in the Swedish EEZ is scheduled to start later this year.
Nord Stream 2 is already in possession of all permits required for the construction and operation of the pipeline in Germany and Finland (OGJ Online, Mar. 28, 2018; Apr. 6, 2018). Permitting procedures in the two remaining countries along the route—Russia and Denmark—are proceeding as planned, the company said.
Once completed, the 1,230-km Nord Stream 2 system will transport gas from Russia to the European Union across the Baltic Sea. It will largely follow the route and technical concept of the Nord Stream pipeline.
The line will have the capacity of 55 billion cu m/year of gas.
Firms propose development of Permian Highway line
Kinder Morgan Inc. subsidiary KMI Kinder Morgan Texas Pipeline LLC (KMTP), EagleClaw Midstream Ventures LLC, a portfolio company of Blackstone Energy Partners, and Apache Corp. have signed a letter of intent for the development of the proposed Permian Highway Pipeline Project (PHP Project).
The $2-billion PHP Project is designed to transport as much as 2 bcfd of gas through 430 miles of 42-in. pipeline from the Waha, Tex., area to the US Gulf Coast and Mexico. KMI also is evaluating the economic and hydraulic feasibility of a 48-in. pipeline with increased transportation capacity.
Subject to the execution of definitive agreements and receipt of construction approvals, the project is expected to be in service in late 2020, coinciding with growth and scale Permian production as well as Apache’s production forecast for Alpine High, said Brian Freed, Apache’s senior vice-president, midstream and marketing (OGJ Online, Sept. 7, 2016).
Natural gas supply will be sourced into the PHP Project from multiple locations, including the companies’ existing systems in the Permian basin, with additional interconnections to both intrastate and interstate pipeline systems in the Waha area. The PHP Project will hold capacity on KMI’s intrastate pipeline systems in the market area, enabling gas delivery to the Katy market hub, the Agua Dulce market hub, the Coastal Bend and Kinder Morgan Tejas headers connected to the Freeport LNG export facility, the Cheniere header connected to the Cheniere Corpus Christi LNG export facility, and numerous pipelines along the Texas Gulf Coast.
KMTP and EagleClaw will serve as initial partners with an ownership of 50% each. Apache, who has been jointly developing the proposed project, holds an option to acquire as much as 33% equity from the partners. Apache and EagleClaw will be important shippers on the proposed pipeline, with Apache planning to commit up to 500,000 dekatherms/day. KMTP will build and operate the pipeline.
