OGJ Newsletter

Exploration & DevelopmentQuick Takes

CGG acquiring seismic in UK West Shetland basin

CGG of Paris started acquisition of a high-density, rich-azimuth, towed-streamer multiclient survey in the UK West Shetland basin covering 3,600 sq km. The Oceanic Vega and the Geo Caribbean are being deployed.

The survey, designed in collaboration with international oil majors, focuses on high-resolution seismic data in an area northwest of the Shetland Isles over the northern part of the Rona Ridge, CGG said.

The acquisition involves multiple targets from shallow Tertiary and Cretaceous plays to complex fractured Devono-Carboniferous reservoirs. CGG will process the data using deblending technology and full-waveform inversion velocity modeling. Preliminary data is to be available in early 2019 with final data to be available in mid-2019.

Quadrant touts oil find as one of largest on NWS

Perth-based duo Quadrant Energy Ltd. and Carnarvon Petroleum Ltd.’s multizone Dorado oil discovery in the Bedout subbasin has been assessed as the largest field found on the North West Shelf off Western Australia in the last 30 years.

Carnarvon has completed its assessment of the hydrocarbon volumes in the Dorado structure in permit WA-437-P and reported a 2C contingent resource figure for oil of 171 million bbl plus 16 million bbl of condensate. Contingent 2C gas resources have been assessed as 552 bcf.

Adrian Cook, Carnarvon’s managing director and chief executive officer, said the 171 million bbl of oil discovered with the Dorado-1 wildcat is one of the largest oil resources ever found in the region.

“Oil fields of this significant scale are not often found, with the last large field discovery on the North West Shelf being around 30 years ago,” he said.

“It is common for additional resources to be discovered in the surrounding area after a large discovery. In this regard we expect to provide the market with further details on prospects identified by the play concept now proven at Dorado, that we believe have the potential to also contain oil resources,” Cook added.

Combining the contingent resources at Dorado into barrels of oil equivalent, Carnarvon has assessed the 1C resources at 128 million boe, 2C resources at 283 million boe, and 3C resources at 566 million boe.

Cook also said the gas-condensate discovered at the Phoenix project to the north in neighboring permit WA-435-P is also a valuable resource that is in addition to the discovered oil. When combined with nearby Roc field, which lies 20 km north and down-dip from Dorado, the aggregate resources are 884 bcf of gas and 36 million bbl of associated condensate on a 2C basis.

The group has confirmed that the Dorado structure contains multiple oil columns in the Caley, Crespin, and Milne Members and a gas-condensate column in the Baxter Member aggregating to a total net hydrocarbon pay of 132 m.

No water was found in the Caley, Baxter, or Milne sands, but the lower section of the Crespin does contain an interpreted water contact.

Quadrant is operator with 80% interest; Carnarvon holds the remaining interest.

Ecuador opens onshore licensing round

Ecuador’s government has opened bidding for exploratory rights to eight onshore blocks in the Oriente basin.

The blocks, offered under production-sharing terms, are labeled Charapa, Chanangue, Perico, Iguana, Sahino, Panayacu Norte, Espejo, and Araza Este. All are near established oil and gas fields in Sucumbios Province.

The Ministry of Energy and Nonrenewable Resources will accept bids in Ecuador’s seventh licensing round until mid-January and plans to sign contracts by mid-March.

Prospective bidders will be screened according to their financial and technical capacities, abilities to operate licenses with at least 40% interests, and HSE polices.

Sapura Upstream makes maiden foray into Australia

Malaysian firm Sapura Upstream Sdn. Bhd. has made its maiden entry into exploration work in Australia through a farmin to three permits offshore Western Australia held by Perth-based private firm Finder Exploration Pty. Ltd. All three permits are in the North West Shelf oil and gas province.

The EP483-TP/25 permit is in shallow water at the southern margins of the Carnarvon basin and close to existing infrastructure. WA-412-P is in the northern Carnarvon basin adjacent to several large oil and gas fields. AC/P61 is in the Vulcan subbasin surrounded by oil and gas discoveries.

On completion of the farmin, Sapura will acquire a 70% interest in all three permits. Finder will retain 30%.

The new venture plans to drill two exploration wells in the Carnarvon basin permits during 2019-20. In the Vulcan subbasin permit, the combine will acquire seismic data in 2019 to mature prospects to decide drilling locations.

Sapura said its entry into upstream Australia is a continuation of its strategy to expand the company’s portfolio and acreage position. The move follows its acquisition of 30% interest in five offshore permits in the Taranaki basin off the North Island of New Zealand in deals with OMV and Mitsui at the end of March.

Sapura is already a major player in Malaysia with exploration and production offshore Sarawak, as well as a presence in the Gulf of Mexico.

Sapura Upstream, formerly known as Sapura Exploration & Production, is a wholly owned subsidiary of international integrated oil and gas services company Sapura Energy.

Drilling & ProductionQuick Takes

BW Offshore starts oil production offshore Gabon

BW Offshore has started oil production from the BW Adolo floating production, storage, and offloading vessel installed in Tortue field in the Dussafu license offshore Gabon, 18 months after the initial investment was made.

The BW Adolo FPSO arrived in late July and hook up of mooring systems and installation of risers and umbilicals were completed in September.

The BW Adolo is a converted very large crude carrier with a production capacity of 40,000 b/d of oil and an oil storage capacity of 1.35 million bbl. It has undergone an increased life extension scope enabling an extended production profile on the back of positive reserve developments, the company said.

Completion of start-up activities and production stabilization are the first priorities, said BW Offshore Chief Executive Officer Carl K. Arnet. At the same time, the company will work towards the final investment decision on Tortue Phase 2 and continue the appraisal program of the discovery at Ruche NE, he said.

BNK completes drilling well in Tishomingo field

BNK Petroleum Inc., Camarillo, Calif., said it encountered hydrocarbon shows comparable to the company’s best wells while drilling the Brock 4-2H well in the Caney shale oil acreage in Tishomingo field in the SCOOP region in Oklahoma. The BNK-operated well was drilled and cased and is awaiting completion.

The major oil firm that owns the minority interest in the well is preparing to drill the Anderson 1-5H10X3 well, in which BNK has a 33% working interest. The Anderson 1-5H10X3 is a planned 2-mile lateral also targeting the Caney formation and offsetting the Brock 4-2H well.

The completion of the Brock 4-2H well is scheduled to begin after the casing has been set in the Anderson 1-5H10X3 well to avoid the hydraulic fracturing interfering with the drilling of the Anderson well. The companies are coordinating scheduling of simultaneous fracture stimulations once the Anderson well drilling rig has been released.

Pengrowth: Lindbergh flow tops 18,000 b/d

Bitumen production at Pengrowth Energy Corp.’s Lindbergh thermal oil project in the Lloydminster fairway of Alberta’s Cold Lake area has exceeded 18,000 b/d of bitumen.

Although three of eight infill wells drilled this year are on pump and starting to produce, output will decline by 40% briefly for maintenance, Pengrowth said.

The first commercial phase of the steam-assisted, gravity drainage project came onstream at 12,500 b/d in early 2015. The rate has been increased through optimization. A second development, for which the company received approval in 2016, would add 27,500 b/d of production capacity.

The company expects Lindbergh output to recover to 18,000 b/d by yearend and to average 16,500 b/d for the year. It expects production to reach 17,500-18,000 b/d in 2019 and 19,500-20,000 b/d in 2020.

In addition to drilling the infill wells, the company is recommissioning the project’s pilot facility to provide extra steam and has received approval to inject noncondensable gas to maintain reservoir pressure and lower injector-well steam requirements by 15-20%. It also is collaborating with the University of Calgary on a study of injection of solvents to optimize recovery and efficiency.

Nexen starts work on Long Lake expansion

Nexen Energy has started work on a 26,000-b/d expansion of its Long Lake integrated oil sands project in the Athabasca region of Alberta, 25 miles southeast of Fort McMurray.

The CNOOC Ltd. subsidiary expects production from three well pads in the $400-million (Can.) Long Lake Southwest Expansion project to begin in late 2020.

Existing production capacity is 72,000 b/d via steam-assisted gravity drainage. Nexen upgrades the bitumen with a proprietary technology that gasifies separated asphaltenes to produce synthesis gas, from which hydrogen is separated for use in an on-site hydrocracker.

PROCESSINGQuick Takes

Gazprom lets contract for Salavat integrated complex

PJSC Gazprom subsidiary JSC Gazprom Neftekhim Salavat has let a contract to Wison Engineering Services Co. Ltd. subsidiary Wison Engineering Ltd. to provide technical support for a natural gas-to-polyolefins (ethylene and propylene) project at its integrated 10 million-tonne/year refining and petrochemical production site in Salavat, Republic of Bashkortostan, Russia.

Alongside delivering technical support to Gazprom Neftekhim Salavat during the prefeasibility study stage, Wison also will support project process design, process proposal selection, basic technological data, and economic feasibility analysis of the project, the service provider said.

Wison will work with Gazprom Neftekhim Salavat’s design institute to prepare data for the prefeasibility study.

Gazprom Neftekhim Salavat has yet to reveal specific details of the proposed gas-to-polyolefins project.

Ineos lets contract for Grangemouth cracker expansion

Ineos Olefins & Polymers UK, a unit of Ineos AG, has let a contract to Linde AG subsidiary Selas-Linde GMBH to build a tenth furnace that will improve efficiency and increase production capacity of the existing Kinneil Gas cracker at the ethylene plant of its 10 million-tonne/year integrated refining and petrochemical complex in Grangemouth, Scotland.

The £60-million Grangemouth expansion will ensure the business can continue meeting growing demand for its products from the site, which in 2016, began receiving supplies of US shale gas ethane under a long-term agreement, Ineos said.

Subject to planning approval, preparatory project work will begin later this year, with main construction work scheduled to start in 2019 for a targeted commissioning by yearend 2020.

Confirmation of the unspecified contract—for which a value was not disclosed—follows a June 2017 announcement by Ineos that it was planning a series of proposed grassroots and brownfield projects to expand its ethylene and propylene production capacities in Europe to support continued growth of the company’s European petrochemical business.

Alongside the addition of a propane dehydrogenation plant designed to produce 750,000 tpy of propylene for Ineos units across Europe, the proposed projects were to include expansions of ethylene production capacities by 900,000 tpy total at the company’s existing crackers at Grangemouth and Rafnes.

Methanex lets contract for Geismar 3 methanol plant

Methanex Corp., Vancouver, BC, has let a contract to Johnson Matthey PLC to license its proprietary autothermal reforming (ATR) and methanol technology for a 5,000-tonne/day methanol plant to be built adjacent to Methanex’s existing methanol plants in Geismar, La. (OGJ Online, Jan. 27, 2015).

As part of the contract, Johnson Matthey will supply a license for a 5,000-tonne/day ATR methanol technology flowsheet, including associated engineering, proprietary equipment, and catalyst supply for the unit, which will have a production capacity of 1.8 million tonnes/year, the service provider said.

This latest contract follows Methanex’s award to KBR Inc. to provide front-end engineering design services for the proposed project, for which a final investment decision is due by mid-2019 (OGJ Online, July 31, 2018).

Methanex currently operates two methanol plants at Geismar, each with a production capacity of 1 million tpy.

Sonatrach lets provisional EPC contract for LPG train

State-owned Sonatrach has provisionally let a contract to a subsidiary of Maire Tecnimont SPA, Milan, to provide engineering, procurement, and construction services for implementation of a fourth LPG processing train inside Sonatrach’s existing ZCINA gas processing complex in central Algeria’s Hassi Messaoud area.

As part of the lump-sum contract valued at $248 million on a multicurrency basis, Tecnimont will deliver EPC activities for the new train, which will have an 8 million-cu m/day capacity for extraction of LPG and condensate from associated gas coming from plants nearby but outside the battery limits of the ZCINA complex, the service provider said.

This project will be an extension to the existing ZCINA LPG complex, which features three LPG trains Sonatrach commissioned in June 2013 to increase production of LPG and condensate from Hassi Messaoud field, Maire Tecnimont said.

The service provider said it expects the provisional EPC contract award to be confirmed soon after finalization of contract annexes with Sonatrach.

TRANSPORTATIONQuick Takes

FERC issues draft EIS for Driftwood LNG

The US Federal Energy Regulatory Commission released a draft environmental impact statement for the proposed Driftwood LNG export project and an associated pipeline in four Louisiana parishes. The project would provide gas and process to produce as much as 27.6 million tonnes/year of LNG for export, FERC reported. Comments are being accepted through Nov. 5.

FERC said the project consists of two main components:

• Construction and operation of the export facility, which would include five LNG plants to liquefy the gas, three tanks to store the LNG, an LNG marine facility with carrier loading equipment and tanker berths, and other appurtenant facilities at a site near Carlyss, La., in Calcasieu Parish.

• Construction and operation of 96 miles of pipeline, three compressors, and 15 meter stations to deliver gas to the liquefaction plant and export terminal.

The draft EIS is the culmination of an extensive evaluation process, including months of assessment and feedback from federal and state agencies and the public with respect to the project, noted its sponsor, Houston-based Tellurian Inc.

Publication of the draft EIS is a milestone in the project’s regulatory process and was completed ahead of FERC’s recently updated schedule, Tellurian Pres. Meg Gentle said.

“We continue to work in partnership with all the regulatory agencies to complete the final [EIS] by January 2019 and begin construction of the Driftwood Project thereafter, with about $30 billion of infrastructure investment and nearly 50,000 direct and indirect jobs in at least 18 US states,” she said.

Oneok to expand W. Texas LPG system second time

Oneok Inc., Tulsa, will spend $295 million for a second expansion of its West Texas LPG pipeline system, which provides natural gas liquids takeaway capacity for Permian basin producers.

The expansion includes the construction of four pump stations, two pump station upgrades, and pipeline looping that will increase the West Texas LPG mainline capacity by 80,000 b/d, and additional infrastructure to connect West Texas LPG with Oneok’s Arbuckle II Pipeline project.

The expansion, with completion expected in first-quarter 2020, is supported by long-term dedicated NGL production from six third-party gas processing plants in the Permian basin that are expected to produce as much as 60,000 b/d of NGLs.

The first expansion, a 110,000-b/d lateral extension of the West Texas LPG system into the Delaware basin, as well as expansion of the existing mainline system, is under construction, Oneok said, and is expected to be in service this month.

In July, Oneok became the sole owner of West Texas LPG after acquiring the remaining interest from Martin Midstream Partners LP for $195 million (OGJ Online, July 26, 2018).

Oneok continues discussions with producers and processors in the region for additional potential volume commitments.

West Texas LPG Pipeline consists of 2,600 miles of NGL pipeline in Texas and New Mexico and provides transportation to the Mont Belvieu market center from nearly 40 third-party gas processing plants in the Permian basin.

ETP to build PGC line for Permian oil takeaway

Energy Transfer Partners LP, Magellan Midstream Partners LP, MPLX LP, and Delek US Holdings Inc. have received sufficient commitments to proceed with plans to construct a 30-in. common-carrier pipeline to transport crude oil from the Permian basin to the Texas Gulf Coast region.

The 600-mile Permian Gulf Coast (PGC) pipeline system is expected to be operational in mid-2020 with multiple Texas origins, including Wink, Crane, and Midland, and the capability to transport crude oil to both ETP’s Nederland, Tex., terminal and Magellan’s East Houston, Tex., terminal.

An open season for additional shipper volume commitments will launch this week. If needed, the pipe diameter could be increased to expand capacity based upon additional commitments received.

The project is subject to receipt of customary regulatory and board approvals of the respective entities.

MarkWest launches open season for Appalachia line

MarkWest Liberty NGL Pipeline LLC, a subsidiary of MPLX LP, has launched a binding open season to solicit commitments from potential shippers for a proposed pipeline to serve Appalachian producers.

The pipeline would provide transportation services of a mixed stream of natural gas liquids—including propane, normal butane, isobutane, pentanes, and higher molecular-weight hydrocarbons—from natural gas processing plants in West Virginia and Pennsylvania to fractionation facilities in Ohio and Pennsylvania (OGJ Online, Feb. 12, 2018).

Shippers electing to make long-term volume commitments during the open season will be eligible to receive firm service for their committed volumes.

The open season runs through Oct. 12.