GENERAL INTEREST Quick Takes
TotalEnergies to exit Canadian oil sands
TotalEnergies SE will exit the Canadian oil sands market, the company said as part of its strategy and outlook presentation Sept. 28, 2022.
TotalEnergies chief executive officer Patrick Pouyanné said that the asset’s growth potential is not within TotalEnergies’ low carbon strategy and that the company will create a spinoff entity in which it will retain minority shareholding to temporarily smooth the transition.
The separated assets will include TotalEnergies’ interest (24.58%) in the Suncor Energy-operated Fort Hills mining project, its 50% interest in the ConocoPhillips-operated Surmont thermal project—both in the Alberta region—as well as midstream and trading-related activities.
Generated cash flow from the assets for 2022 is $1.5 billion, Pouyanne said. In 2020, the French energy company took a $9.3 billion impairment on the value of its oil sands assets.
The sale will be submitted to a vote at the next annual shareholders meeting in May 2023.
Antero Midstream to acquire Marcellus gathering assets
Antero Midstream Corp. has agreed to acquire Marcellus shale natural gas gathering and compression assets from Crestwood Equity Partners LP. The acquisition adds roughly 425 undeveloped drilling locations and 120,000 gross dedicated acres in Doddridge and Harrison Counties, W. Va., and increases Antero Midstream’s compression capacity by 20% and gathering pipeline mileage by 15%.
The assets include 72 miles of dry gas gathering pipelines and nine compressor stations with about 700 MMcfd of capacity. Current throughput on the system is about 200 MMcfd, leaving space for growth without significant capital investment.
Throughput will be gathered and compressed under the agreement established by Crestwood, which is substantially like Antero Midstream’s existing gathering and compression agreement with Antero Resources, but not considered in the low-pressure gathering rebate volumes with Antero Resources.
Crestwood’s assets have been on natural field decline since 2017, its anchor producer having focused development activity on the rich-gas window of the Southwest Marcellus shale. The system’s initial anchor producer was Mountaineer Keystone LLC.
Crestwood described the assets as non-core to its long-term growth strategy of becoming a leading midstream operator in Williston, Delaware, and Power River basins and said it intends to use proceeds from the sale to enhance financial flexibility as it continues integrating its Oasis Midstream, Sendero Midstream, and CPJV acquisitions.
The companies expect the $205-million transaction to close fourth-quarter 2022.
Origin flags exit from upstream exploration
Origin Energy Ltd. will exit its Beetaloo basin interests in the Northern Territory and intends to divest all its upstream exploration permits in Australia.
The company agreed to sell its interest in Beetaloo basin permits EP76, EP98, and EP117 it holds in joint venture with Falcon Oil and Gas to Tamboran Resources Ltd. for an upfront payment of $60 million (Aus.) plus a 5.5% royalty on future production from the permits.
The company also has executed an agreement to receive up to 36.5 petajoules/year of gas for 10 years on any production conditional on Tamboran taking positive final investment decision to develop the project and associated infrastructure.
Tamboran will assume Origin’s 77.5% interest and operatorship of the JV working the permits if not pre-empted by Falcon Oil and Gas, which holds the other 22.5% interest.
Origin has been exploring the Beetaloo in partnership with Falcon for 8 years. The permits contain unconventional shale gas finds in Velkerri, Kyalla, and Amungee exploration wells.
One of Origin’s other main upstream interests is in the onshore Canning basin of Western Australia where it partners with Buru Energy Ltd., Perth.
Buru will consult with Origin over an orderly exit from the permits. Origin holds 50% and 40% interests in several permits with Buru, including the Rafael-1 gas condensate discovery in permit EP391.
Buru expects the process will delay any field operations until the 2023 northern Australian dry season.
Origin’s divestments will have no impact on the company’s integrated gas business, including the company’s investment in Australia Pacific LNG at the Curtis Island plant.
Exploration & Development Quick Takes
MOL makes discovery onshore Pakistan
A new gas and condensate discovery in TAL Block in Pakistan’s Khyber Pakhtunkhwa province derisks further exploration in the block, partner Oil & Gas Development Co. Ltd. (OGDCL) said in a release Sept. 19. OGDCL holds 30% working interest in the exploratory phase.
MOL Pakistan Oil & Gas Co. BV, operator of the TAL joint venture, made the discovery in the Lockhart formation in Tolanj West-2 development well.
The well was spudded Apr. 10 to produce hydrocarbons from the previously discovered horizon of Tolanj West D&PL (Lumshiwal formation) and to test hydrocarbon potential of Lockhart, Shinawari, and Samanasuk formations (exploratory targets). The well has been drilled to 4,119 m TVD.
Based on interpretation results of wireline logs data, the Lockhart formation tested at rate of 8.3 MMscfd of gas and 34 b/d of condensate at wellhead flowing pressure of 1,285 psi on a 32/64-in choke.
Other partners are Pakistan Petroleum Ltd., Pakistan Oilfields Ltd., and Government Holdings Private Ltd.
Tyra redevelopment progresses with process module lift
Work on the North Sea Tyra redevelopment project has advanced with the successful offshore lift and installation of the Tyra II process module (TEG) in the North Sea, partner Norwegian Energy Co. ASA (Noreco) and Heerema Marine Contractors said in separate releases Oct. 4.
The 17,000 metric tons process module was lifted onto waiting jackets and installed by Heerema’ Sleipnir. The lift broke a world record as the heaviest crane lift ever undertaken at sea.
All eight platforms are now in their final position at Tyra field. Over the coming weeks, Sleipnir will lift and install two bridges and the flare for Tyra II, completing the project’s final offshore lifting and installation campaign. When all connections are welded, TotalEnergies’ hook-up and commissioning team will focus on completing and powering up the installed platforms and reconnecting them to the existing North Sea infrastructure.
“With remaining execution taking place solely at the Tyra field we are today several steps closer to a near doubling of production from the DUC [Danish Underground Consortium] with Tyra onstream next winter,” said Marianne Eide, chief operating officer at Noreco.
In August the consortium noted the project’s delay to winter 2023-2024 from second-quarter 2023 driven by global supply chain challenges that impacted fabrication work on the module.
Tyra is the largest gas condensate field in the Danish Sector of the North Sea. Its infrastructure process more than 90% of gas produced in Denmark, as well as the entire gas production of the DUC comprised of operator TotalEnergies SE 43.2%; Noreco 36.8%, and Nordsøfonden 20%.
Carnarvon Energy reveals Bedout subbasin prospects
Carnarvon Energy Ltd., Perth, partner of the Santos-operated Bedout subbasin joint venture contemplating development of Dorado oil field offshore Western Australia, says over 100 prospects have been identified across the JV’s four permits and the top 20 contain total potential resource of around 1.5 billion boe (Pmean).
The top five prospects in each permit have been re-assessed following discovery of Pavo-1 in WA-438-P earlier this year with an eye towards potentially high-grading them to near-term drilling status.
Carnarvon nominated Pavo South (WA-438-P), Ara (WA-435-P), Starbuck (WA-436-P), and Flint (WA-436-P) as the top four prospects being high-graded for potential inclusion in new exploration plans.
Pavo South has potential to hold 66 million bbl (Pmean) and could bolster reserves at the Pavo discovery and enhance potential of the Torin prospect 15 km to the southeast.
Ara is a potential gas-condensate prospect brought to the fore by the reprocessed Zeester 3D survey. Success in Ara would enhance the potential of nearby Wendolene and Yuma prospects.
Starbuck and Flint prospects are medium risk plays that will be high-graded through analysis of the Keraudren 3D survey and its areal extensions acquired in 2019-2022, the company said. Success in either would derisk prospects like Arthur to the northwest.
Santos is operator of all four permits with interests ranging from 70-80%. Carnarvon holds the remaining interests in each.
Drilling & Production Quick Takes
Petrobras awards Keppel P-83 FPSO contract
Petroleo Brasileiro SA (Petrobras) has awarded Keppel Offshore & Marine (Keppel O&M)’s wholly owned subsidiary, Keppel Shipyard, a construction contract for the 225,000-b/d P-83 floating production, storage, and offloading (FPSO) vessel. Scheduled for completion in 2027, P-83 is the third FPSO Keppel O&M will build for deployment by Petrobras at Buzios field in presalt Santos basin offshore Brazil.
The FPSO, the eleventh to be stationed at the field, will have up to 12 million cu m/day of gas processing capacity, and 1.6 million bbl of crude oil storage.
Petrobras plans 15 subsea wells for use with P-83, eight producers and seven injectors.
The P-83 will be built by shipyards in Singapore, China, and Brazil. The platform, expected to begin production in 2027, will contribute to increase the field’s installed capacity to 2 million b/d from the current 600,000 b/d.
Petrobras is the operator of Buzios with 92.6% interest. CNOOC and CNODC each hold 3.7%.
CNOOC lets drilling contract for work offshore Gabon
CNOOC Africa Holding Ltd. (CNOOC) let a contract to Stena Drilling for the Stena Icemax mobile offshore drilling unit (MODU) for a two-well program offshore Gabon.
The program is scheduled for first-quarter 2023 and has an estimated total campaign duration of 90 days.
CNOOC Africa Holding is operator in licenses BC9 and BCD10 offshore Gabon with 100% working interest.
In 2014, a large deepwater gas discovery on BCD10 was announced following drilling and appraisal of the Leopard-1 well about 145 km off the coast. Multiple presalt and postsalt prospects and leads have been identified with high exploration potential, the company said.
Karoon moves to Patola development from Baúna intervention
Karoon Energy Ltd., Melbourne, is moving to drill two development wells in Patola field in Santos basin offshore Brazil following completion of its third well in the Baúna field intervention campaign.
The company installed a new electric submersible pump in Baúna field SPS-92. It is currently flowing at 9,500 b/d compared to 5,500 b/d prior to the intervention.
Together with the first two well interventions, total oil production from Baúna is near the upper end of pre-intervention expectations at 22,000 b/d.
Considering the results and the small production increment expected from the fourth planned intervention (BAN-1) of a few hundred b/d, Karoon decided to defer the program and move the Maersk Developer rig to development of Patola field.
The first of two Patola development wells, expected to spud end-September, mark the company’s first development project since taking operatorship and 100% interest in the Baúna concession in 2020.
The Baúna intervention campaign began in May 2022 after 18 months of planning aimed at installing new down-hole pumps and gas lift equipment targeting an increase in field production up to 10,000 b/d before resumption of natural reservoir decline.
Patola field was discovered in the same BM-S-40 concession by Petrobras in 2011. Karoon made final investment decision in June 2021 to develop the field via two subsea wells, pressure controls, flowlines, risers, umbilicals, and electrohydraulic control equipment tied back to spare riser slots on the Baúna floating production storage and offtake vessel.
Patola, expected on stream early 2023, is expected to add over 10,000 b/d to Baúna concession production prior to natural decline.
PROCESSING Quick Takes
Chevron’s Pasadena refinery to increase crude processing capacity
Chevron Corp. is undertaking a project that will expand processing of light tight oil (LTO) and increase overall crude capacity at subsidiary Pasadena Refining System Inc.’s (PRSI) 110,000-b/d refinery in Pasadena, Tex.
Alongside increasing the site’s processing of lighter crudes by about 15% to 125,000 b/d, the LTO project will enable the refinery to produce jet fuel, improve process safety, and reduce emissions, Chevron confirmed to OGJ via e-mail.
Recently granted regulatory approval to proceed, the estimated $400-million project specifically will allow PRSI to boost its take of LTO crude feedstock produced in the Permian basin of West Texas and southeastern New Mexico, according to the operator.
In addition to strengthening the refinery’s product flexibility and supply to a portion of retail markets in Texas and Louisiana, the Pasadena expansion provides Chevron with additional capacity to process its own equity crude production in the Permian, where in second-quarter 2022, the operator averaged net production of 696,000 boe/d, a year-over-year increase of more than 20% and up slightly from first-quarter 2022.
In 2022-23, Chevron said LTO project activities will include completing final design engineering, building foundations, and installing equipment, while pipe fabrication and interconnections with equipment will continue in 2023-24.
With preliminary construction works at the site already under way, the operator said it expects to test equipment and reach mechanical completion of the project in 2024, Chevron said in a recent presentation to local citizen advisory councils.
The 466-acre Pasadena refining complex includes the 323-acre refinery, 5.1 million bbl of oil and products storage capacity, an associated marine terminal and logistics system, and 143 acres of additional land along the Houston Ship Channel usable for expansion.
The project will involve a mix of works, including the permanent shutdown of existing but historically unreliable units, as well as the modification and reconfiguration of other units, according to Chevron and recent project documents from the Texas Commission on Environmental Quality.
Among other unit modifications and shutdowns, parts of the site’s existing FCC and alkylation units—which will be permanently shuttered as part of the LTO project—will be repurposed as prefractionation equipment for the expanded crude unit, according to TCEQ documents.
Borealis clears construction to restart on Kallo PDH unit
OMV AG’s majority owned Borealis AG is resuming construction of a grassroots 750,000-tonnes/year (tpy) propane dehydrogenation (PDH) plant at subsidiary Borealis Kallo NV’s petrochemical production site in Kallo, Belgium, in the wake of delays related to allegations of human-rights violations by one of the project contractors.
Following a halt to and subsequent suspension of construction activities at Kallo in late July and early August, respectively, Groupe Ponticelli Frères—Borealis’ newly selected contractor for mechanical and specialized piping installation on the PDH plant—restarted works at the site on Oct. 3, OMV and Borealis said in releases.
While construction works on the new plant will gradually continue to ramp up, the 2-month suspension of construction activities will delay commissioning of the PDH plant to second-half 2024 from its previously targeted startup in 2023, the operators said.
Plant construction initially came to a halt on July 27 after news reports surfaced accusing project contractor IREM SPA of human-rights violations at the site, including allegations of human trafficking, according to separate releases from Borealis and Ponticelli, which was jointly awarded the initial contract with IREM for mechanical works—equivalent to about 80% of overall project construction—on the plant in February 2022.
On Aug. 3, Borealis decided to indefinitely suspend construction under the IREM-Ponticelli contract to allow enough time for an investigation by Belgian authorities, as well as to implement additional measures to control and prevent any further potential wrongdoing by subcontractors at the site.
In mid-August, Borealis terminated its contract entirely with IREM, according to an Aug. 18 release from the operator.
In an Aug. 29 release, IREM said it was not directly the subject of any formal accusations from the Belgian authorities but that it was fully complying with an investigation focusing on non-European Union workers hired by IREM for the Kallo PDH plant project.
The nearly €1-billion Kallo PDH plant project, which began construction in September 2019, had reached nearly 80% completion as of August 2022, according to OMV.
Chinese operator lets contract for new petrochemical plant
Lihuayi Group Co. Ltd. has let a contract to Lummus Technology LLC to provide technology and engineering services for a new polypropylene (PP) plant to be built at its 5.5-million-tonnes/year (tpy) refining and petrochemical complex in Dongying, Shandong Province, China.
As part of the contract for the new PP unit, Lummus will license its proprietary Novolen PP technology, as well as deliver basic design engineering, trading, and other unidentified services for the project, the service provider said on Sept. 27.
Lummus confirmed this latest contract—for which the service provider did not reveal a value—follows Lihuayi’s previous award to the firm for its proprietary CATOFIN propane dehydrogenation (PDH) technology for a new 600,000-tpy PDH unit also to be built at the complex.
The new PP and PDH units come as part of Lihuayi’s upcoming petrochemicals expansion at the Shandong complex, which will include adding new units for production of ethylene, styrene, and propylene, according to a Mar. 29, 2022, release from Lummus catalyst partner Clariant International Ltd.’s Clariant Catalysts, to which Lihuayi awarded three separate contracts for new units included in the project.
As part of the March 2022 contracts, Clariant will provide a selection of its high-performance proprietary catalysts, including:
- OleMax 101 catalyst—used to purify gas streams for acetylene, dienes, oxygen, nitrogen oxides, and heavy metals in a single reactor—for olefins recovery from cracked gas and off-gas streams at a new 1-million tpy olefins plant.
- StyroMax UL 3 rib-shaped styrene catalyst for production of styrene monomer from a new 720,000-tpy styrene plant.
- CATOFIN catalysts and Heat Generating Material (HGM) to produce 600,000 tpy of propylene at the complex’s new Lummus-licensed PDH plant.
- Firm details regarding a commissioning timeline for Lihuayi’s completed petrochemicals expansion at Shandong have yet to be revealed.
TRANSPORTATION Quick Takes
ADNOC, RWE sign deal for first LNG delivery to FLNG terminal in Germany
Abu Dhabi National Oil Co. (ADNOC) and RWE signed an agreement for a first shipment of LNG to arrive in Brunsbüttel, Germany, this year, as well as a memorandum of understanding (MoU) for multiyear supplies starting in 2023.
The first delivery of LNG will be routed to Elbehafen LNG near Hamburg. Elbehafen LNG will operate one of the two floating storage and regasification units (FRSU) RWE chartered on behalf of the German government.
The cargo is expected to be shipped from Das Island, Abu Dhabi, and to arrive in Germany in late December 2022. The 137,000-cu m cargo will be the first supplied to the German gas market via the floating LNG import terminal at Brunsbüttel as Germany looks to build LNG supply infrastructure and set up a more diversified gas supply.
The MoU for multiyear LNG supplies from ADNOC can be delivered to Germany through either floating or land-based regasification terminals as these become operational, RWE said.
Amplify gets permission to remove damaged pipeline segments
Amplify Energy Corp. has received US Army Corps of Engineers permitting to proceed with pipeline repair plans that were reviewed and approved by federal pipeline safety regulators earlier this year. Plans include removing damaged pipeline segments from the ocean to allow regulators, parties involved in litigation regarding the 2021 pipeline rupture, and Amplify to complete further analysis of the incident, including anchor impacts to the pipe.
The company estimates the work will take 3-4 weeks to complete after deployment of a repair barge. New segments will be installed subsequently, in accordance with approved repair plans.
A series of safety integrity tests required by federal regulators, including an Oct. 5, 2021, corrective action order issued by the Pipeline and Hazardous Materials Safety Administration (PHMSA), will follow repair work to the 16-in. OD, 17-mile pipeline. Once PHMSA has reviewed and finalized Amplify’s pipeline restart plans, the company will begin the process of bringing its Beta crude oil field back online, targeting first-quarter 2023.
Beta contained 12-million bbl of estimated proved net oil reserves as of year-end 2021, according to Amplify. The company had been producing roughly 24,000 boe/d from the field before the pipeline rupture.
Amplify last month entered a no-contest plea with the State of California to resolve all criminal matters stemming from the incident, during which the pipeline’s position shifted 105 ft. The segment in question was located 5 miles offshore in 160 ft of water.
Galilee Energy signs pipeline MoU with APA Group
Galilee Energy Ltd., Brisbane, has signed a non-binding memorandum of understanding (MoU) with pipeline infrastructure combine APA Group for potential construction of a pipeline to connect Galilee’s Glenaras gas project in Galilee basin near Longreach in central eastern Queensland to Australia’s east coast markets.
Terms of the MoU provide a framework for the companies to negotiate agreements under which APA could potentially design, develop, and operate the infrastructure to connect Glenaras and use APA’s existing assets to transport gas to multiple markets. Further discussions would be held leading to design, route selection, and valuations.
APA’s initial concept is to bring a 420 km line south from Glenaras to the Cooladdi compressor station of the existing South West Queensland Pipeline (SWQP). SWQP connects Moomba gas hub in South Australia to Wallumbilla hub in Queensland and enables bi-directional flow of gas between Queensland and southern markets via the Moomba to Sydney trunkline and the Moomba to Adelaide pipeline system. At Ballera in southwest Queensland, there is a connection to the Carpentaria gas pipeline which supplies gas to Mount Isa.
TC Energy awards Southeast Gateway pipelay to Allseas
TC Energy Corp. awarded Allseas Group SA a contract to build the 715-km, 36-in. OD subsea Southeast Gateway natural gas pipeline offshore southeast Mexico. The pipeline will deliver 1.3 bcfd of gas from Tuxpan to Coatzacoalcos and Dos Bocas.
The companies expect pipelay to begin end-2023 to meet a mid-2025 in-service date.
Southeast Gateway is being built as part of an alliance between TC Energy and Mexico’s state electricity utility Comisión Federal de Electricidad (OGJ Online, Aug. 8, 2022).
Allseas also installed TC Energy’s 2.6-bcfd Sur de Texas-Tuxpan offshore pipeline delivering gas produced in Texas to Mexico. Sur de Texas-Tuxpan began operations in 2019.
