GENERAL INTEREST Quick Takes
Iraq, TotalEnergies advance gas growth project
TotalEnergies and the Iraqi government have defined the necessary conditions and mutual insurances to move forward with the Gas Growth Integrated Project (GGIP), a multi-billion-dollar project aimed at monetizing and developing the natural gas resources of Iraq and improving the country’s electricity supply.
The agreement was reached through exchanges in recent months while confirming terms of a development and production contract signed in 2021, TotalEnergies said in a release Apr. 5.
The parties agreed on a 30% stake for Basrah Oil Co. (BOC) in GGIP. TotalEnergies has invited QatarEnergy to take a 25% stake. Consortium holdings will be comprised of TotalEnergies (45%), BOC (30%), and QatarEnergy (25%).
TotalEnergies and partners will invest about $10 billion to recover flared gas on three oil fields to supply gas to power generation plants; and to build a seawater treatment plant to provide water injection for pressure maintenance to increase regional oil production as an alternative to use of fresh water.
In addition, TotalEnergies will develop a 1 Gw solar power plant to supply electricity to the Basrah regional grid. In agreement with Iraqi authorities, TotalEnergies will invite the Saudi company ACWA Power to join the solar project.
Rosneft to increase oil supplies to India
Rosneft Oil Co. and Indian Oil Corp. Ltd. signed a term agreement to “substantially increase oil supplies as well diversify the grades to India,” Rosneft said in a release Mar. 29.
The agreement was signed on a working trip to India by Igor Sechin, Rosneft chief executive officer. During the trip, Sechin met with officials from the Indian government, as well as with the heads of some of the country’s largest oil and gas companies, Rosneft said.
Rosneft and IOC also discussed ways to expand cooperation between Rosneft and Indian companies along the entire energy sector value chain, including possible payments in national currencies, according to the release.
Indian companies ONGC Videsh Ltd., Oil India Ltd., Indian Oil Corp., and Bharat Petroresources have been owners of 49.9% of Rosneft subsidiary JSC Vankorneft since 2016. The company, in Krasnoyarsk Territory, develops Vankorskoye oil and gas condensate field.
A consortium of Indian companies (Oil India Ltd., Indian Oil Corp., and Bharat Petroresources) also owns 29.9% of Taas-Yuryakh Neftegazodobycha, which develops the Central Block and the Kurungsky license block of Srednebotuobinskoye field, one of Rosneft’s largest assets in Eastern Siberia.
Norwegian regulator awards North Sea CO2 storage licenses
Aker BP, OMV (Norge) AS, Wintershall Dea Norge AS, and Altera Infrastructure Group have been awarded CO2 storage licenses on the Norwegian Continental Shelf (NCS) by the Norwegian Ministry of Petroleum and Energy.
An eastern license, Poseidon, has been awarded to a partnership of Aker BP and OMV in the Norwegian North Sea. The license will be operated by Aker BP (60%). The work program includes 3D seismic acquisition and a drill or drop decision by 2025.
Poseidon could potentially provide storage of more than 5 million tonnes/year (tpy) of CO2. The intent is to inject CO2 captured from multiple identified industrial emitters in northwest Europe, including from Borealis’ various industrial sites.
The partners entered into a collaboration agreement with Höegh LNG to provide marine CO2 infrastructure to collect, aggregate, and transport CO2 from emitters in Europe to the NCS.
A northwest license, Havstjerne, has been awarded to Wintershall and Altera through subsidiary Stella Maris CCS AS. The license is 135 km southwest of Stavanger and will be operated by Wintershall (50%). Estimated storage capacity is about 7 million tpy.
Wintershall and Altera intend to transport CO2 by ship to the license. The partnership has investigated emissions clusters in the Baltics, the Netherlands, Portugal, and Spain.
Petroleum Sarawak Exploration & Production acquires offshore PSCs from Shell
Petroleum Sarawak Exploration & Production Sdn. Bhd. has acquired two offshore production sharing contracts (PSC) in the Baram Delta from Sarawak Shell Berhad.
The sale concerns non-operated interests of 40% in the Amended 2011 Baram Delta EOR PSC (BDO PSC) and 50% in the SK 307 PSC (SK307 PSC), Shell said in a release Mar. 15. The remaining interests in both PSCs are held by operator Petronas Carigali Sdn. Bhd.
Completion of the sale follows regulatory approval from Malaysia Petroleum Management, Petronas as the custodian of national hydrocarbon resources in Malaysia. The transaction has an effective date of Jan. 1, 2023.
Exploration & Development Quick Takes
Shell, QatarEnergy sign farmout for block offshore Mauritania
Shell plc has agreed to farmout a 40% interest in C-10 block offshore Mauritania to QatarEnergy.
QatarEnergy will hold a 40% working interest in the exploration and production agreement, while Shell Exploration and Production Mauritanie BV will hold 50% and remain as operator, QatarEnergy said in a release Apr. 2. Société Mauritanienne des Hydrocarbures will hold the remaining 10% interest.
C-10 block lies about 50 km off the coast of Mauritania in water depths of 50-2,000 m and covers about 11,500 sq km.
The farmout is subject to government approval.
NZOG completes farm-in to explore Perth basin
New Zealand Oil & Gas Ltd. signed a binding farm-in agreement with Triangle Energy (Global) Ltd., Perth, to acquire a 25% interest in onshore license L7 and permit EP 437 in the North Perth basin of Western Australia for $9.96 million (Aus).
Triangle completed a farm-out agreement with Talon Energy Ltd. in March. Talon is to acquire a 25% interest in the same two permits. L7 is the production licence for Mount Horner oil field. EP 437 comprises the surrounding exploration permit.
Triangle retains 50% interest with NZOG and Talon now holding 25% each of L7 and EP437.
Triangle has acquired the Bookara 3D seismic data run across both permits to evaluate new leads and prospects. The joint venture will study the data to determine preliminary resource estimates and likely exploration well locations for a drilling program to begin in first-half 2024.
Drilling & Production Quick Takes
Forza Petroleum suspends Hawler license oil production
OP Hawler Kurdistan Ltd., the Forza Petroleum Ltd. subsidiary operating in the Kurdistan Region of Iraq, shut in production from the Hawler license following the shutdown of the Kurdistan Oil Export Pipeline related to an arbitration decision of the International Chamber of Commerce impacting exports by the Kurdistan Regional Government through the port of Ceyhan in Turkey.
With Hawler storage nearing full capacity, Forza suspended production from the area, it said in a release Mar. 27.
A statement from the Federal Government of Iraq indicates that exports from the port may only resume with the consent of the Iraqi government.
According to Forza, public reports indicate that officials from the different governments involved are in discussions to agree on terms to restart oil exports from the Kurdistan Region. The talks build on those in recent months to resolve issues between the Kurdistan Region and the Federal Government of Iraq, including the development of a new oil and gas law, Forza said.
Forza Petroleum is operator of the Hawler license area with 65% working interest. The license has yielded oil discoveries in four areas, three of which are contributing to production while appraisal and development activity continues.
In its 2022 financial and operations update Mar. 16, the company detailed additional development activities at Hawler infrastructure, noting continuing construction of the gathering system to serve the western flank of the license area and civil works for drilling pads and additional flowlines throughout the area.
The company’s $68.3-million capital budget for 2023 includes extending 3D seismic data coverage for the Hawler license area and completing installation of processing infrastructure and pipelines connecting Banan field and Zey Gawra field to Hawler production infrastructure at Demir Dagh field.
DNO shuts oil production from Tawke, Peshkabir fields
DNO ASA shutdown operated Tawke and Peshkabir oil fields in the Kurdistan region of Iraq 4 days after it was instructed to temporarily cease deliveries to the Iraq-Turkey Pipeline destined for the Mediterranean port of Ceyhan.
The shutdown follows an arbitration ruling in favor of Iraq against Turkey for exporting Kurdish oil without Baghdad’s approval, DNO said in an updated release Mar. 29 (OGJ Online, Mar 27, 2023). DNO had diverted oil production to storage tanks, but capacity is limited, it said.
Tawke and Peshkabir fields averaged combined production of 107,000 bo/d in 2022, representing a quarter of Kurdistan’s total exports.
Prior to shutdown, the Iraq-Turkey Pipeline carried some 400,000 b/d of Kurdish oil and another 70,000 b/d of Iraqi oil for export to Mediterranean and other refineries.
DNO operates the Tawke license containing Tawke and Peshkabir fields with 75% interest. Genel Energy plc holds the remaining 25%.
BW Energy completes first production well at Hibiscus Ruche Phase I
BW Energy finished drilling and completion operations on DHIBM-3H in the Dussafu license offshore Gabon. The production team is preparing for production start-up, which is expected early this month.
The production well, the first of the Hibiscus-Ruche Phase 1 development campaign, was drilled from the BW MaBoMo jackup production platform to a depth of 3,883 m into the Gamba sandstone reservoir in Hibiscus field. Drilling results (drain length and reservoir properties) are in line with expectations, the company said in a release Apr. 3.
Commissioning and start-up of the new gas lift compressor will follow first oil activities on the BW Adolo FPSO.
Drilling operations began at the start of the year with batch setting of conductors and surface casing on three Hibiscus wells. In addition, an additional three conductors have been batch set on slots planned for Ruche-Hibiscus fields.
The drilling campaign followed installation of production infrastructure, risers, and pipeline (OGJ Online, Jan. 9, 2023). Oil produced at Hibiscus -Ruche will be processed on the FPSO together with established Tortue production before offloading to oil tankers.
BW Energy Gabon is operator of the Dussafu license (73.5%) with partners Panoro Energy (17.5%) and Gabon Oil Co. (9%).
Trillion to bring another SASB gas field well to production
Trillion Energy International Inc. expects to bring a new Black Sea well to long-term production with an initial production rate of about 6 MMcfd. The operator recently completed flow testing at the Guluc-2 natural gas well at SASB gas field, offshore Turkey.
After skidding the rig on Mar. 24, 5.5 m of the lower natural gas sands in the Guluc-2 well were perforated and tested Mar. 28 (OGJ Online, Mar. 29, 2023). Flow rates peaked at 16.35 MMcfd, the highest flow test rate measured to date in Trillion’s drilling program, the company said. Shut-in pressure was measured at 2,000 psi.
Guluc-2 discovered 73 m of gas pay across 14 separate intervals. Current flow test results and production is from only 6 m of gas pay; 67 m remains to be perforated in the future ensuring a long-term production horizon for the well.
The Uranus rig is now rigging down and is mobilizing to the East Ayazli Tripod to begin drilling the Bayhanli-2 well. The Bayhanli is estimated to hold 2P reserves of 4.2 bcf.
Trillion Energy is 49% owner of the Black Sea SASB natural gas field.
PROCESSING Quick Takes
Marathon Oil, Noble, Equatorial Guinea agree to advance regional gas hub
Marathon Oil Corp. (MRO), through affiliate Marathon EG Holding Ltd., signed a heads of agreement (HOA) with the Republic of Equatorial Guinea and Noble Energy EG Ltd., a Chevron company, to progress the next phases of Equatorial Guinea regional gas ‘mega hub’ development, Marathon said in a release Mar. 30.
Phase 1 of the gas hub included tieback of Alen natural gas and condensate field in the Douala basin offshore Equatorial Guinea to Punta Europa, Bioko Island, which delivered first gas in February 2021 (OGJ Online, Mar. 1, 2021). Alen gas is processed under the combination of a tolling and profit-sharing arrangement through Alba Plant LLC’s onshore liquified petroleum gas (LPG) plant (MRO 52% interest) and Equatorial Guinea LNG-Holdings Ltd.’s 3.7 million tonnes/year LNG plant (EGLNG, MRO 56% interest).
The HOA aligns all parties on necessary commercial principles to advance gas hub Phases II and III, the company said.
Phase II involves processing Alba Unit (MRO 64% interest) gas, from Jan. 1, 2024, under new contractual terms following the legacy Henry Hub-linked Alba sales and purchase agreement expiration at end-2023.
Phase III is expected to facilitate gas processing from Aseng field at Punta Europa infrastructure.
A recently established bilateral treaty on cross-border oil and gas development between Equatorial Guinea and Cameroon provides additional opportunities to further expand GMH through fast-track monetization of cross-border wet gas fields, Marathon said.
Indian Oil advances proposed Paradip petrochemical complex
Indian Oil Corp. Ltd. (IOC) has granted approval for preliminary development work to proceed on a grassroots petrochemical complex that would be built nearby and integrated with IOC’s existing 15-million tonnes/year (tpy) refinery in Paradip, Odisha, India.
The decision by IOC’s board grants in-principle approval for the operator to carry out preliminary project activities—including preparation of a detailed feasibility report—for setting up the proposed petrochemical complex, IOC said in filings to National Stock Exchange of India Ltd. and BSE Ltd.
The Stage 1 approval estimates the project at a cost of 610.77 billion rupees ($7.39 billion).
To be set up on 284 sq km of land spread over Jagatsinghpur and Kendrapara districts, the Paradip PCPIR will be anchored by IOC’s Paradip refinery and petrochemical units that, together, would supply the chemical complex all necessary feedstock, including monoethylene glycol, petcoke-based synthetic ethanol, and paraxylene-purified terephthalic acid (PX-PTA), according to documentation from India’s National Investment Promotion & Facilitation Agency.
In its 2021-22 annual report to investors, IOC said it expects to commission the PX-PTA plant at Paradip by January 2024. Once completed, the new PX-PTA plant will have a PX production capacity of 800,000 tpy, which will be used as feedstock for an adjacent 1.2-million tpy PTA plant to be built as part of the project.
Alongside supporting IOC’s enhanced focus on further integration of its downstream refining and petrochemical operations to meet India’s rising demand for plastics and textiles, as well as its goal of derisking its conventional fossil fuels business, the new plants come as one IOC’s other petrochemical-related projects at Paradip intended to support the government of Odisha’s plan to establish the Paradip PCPIR (OGJ Online, July 10, 2020).
According to IOC and the government of India, the Paradip petrochemical complex will include a yet-to-be-identified type of cracker for production of ethylene, along with downstream process units for producing derivative products including polypropylene, high-density polyethylene, high-density polyethylene, linear low-density polyethylene, polyvinyl chloride, monoethylene glycol (MEG), among others. The complex also would enable production niche chemicals such as phenol and isopropyl alcohol.
The government of Odisha said IOC has already agreed to the following feedstock supply commitments to the PCPIR:
- PX; 200,000 tpy.
- Polypropylene; 700,000 tpy.
- Petcoke; 1.25 million tpy
- MEG; 450,000 tpy.
With draft versions of the Paradip PCPIR’s environmental impact assessment (EIA) and environmental management plan (EMP) completed and preparation of the final EIA and EMP reports under way, the project will need approval of its final, comprehensive EIA-EMP from India’s Ministry of Environment, Forest, and Climate Change to obtain environmental clearance to proceed to construction.
Neither IOC nor the government of India have officially confirmed details about a timeframe for completion of the Paradip PCPIR or other potential participants.
TRANSPORTATION Quick Takes
US Appeals Court vacates Mountain Valley pipeline’s West Virginia permit
The Fourth US Circuit Court of Appeals has vacated the West Virginia Department of Environmental Protection’s (DEP) water permit of Equitrans Midstream Corp.’s 303-mile, 42-in. OD Mountain Valley natural gas pipeline (MVP), finding multiple defects in its review of the project. The court’s ruling comes just days after it had upheld the sufficiency of Virginia’s environmental review (OGJ Online, Mar. 30, 2023).
The three-judge panel cited 139 state stormwater permit violations and at least 46 “narrative water quality standards violations” that it felt hadn’t been sufficiently addressed before DEP approved the project. “In the face of such a history, it is arbitrary and capricious for an agency to predict compliance without a rational explanation,” Chief Judge Roger Gregory wrote in the court’s opinion. “[DEP] failed to provide a reasoned explanation as to why it believes MVP’s past permit violations will not continue to occur going forward.”
Construction in West Virginia cannot resume until the DEP reconsiders the permit required under Clean Water Act Section 401 to allow crossing of streams and wetlands. The 2-bcfd pipeline is 94% complete, according to Equitrans.
“It is infuriating to see the same 4th Circuit Court panel deal yet another setback for the Mountain Valley Pipeline project and once again side with activists who seem hell-bent on killing any fossil energy that will make our country energy independent and secure,” said Sen. Joe Manchin (D-W. Va.) “This pipeline is more than 90% constructed with 283 miles already laid, and once through the red tape can bring an additional 2 bcfd of natural gas onto the market within months. This project has been through three rounds of water quality permitting but activist groups continue to litigate the last 20 miles.”
QatarEnergy hires Baker Hughes for North Field South compression
QatarEnergy has hired Baker Hughes Co. to supply two main refrigerant compressors (MRCs) for the North Field South (NFS) project to be executed by Qatargas. The MRCs are part of two 8-million tonne/year (tpy) trains that will boost Qatar’s LNG production to 126 million tpy by 2027.
Each MRC train will consist of three Frame 9E DLN Ultra Low NOx gas turbines and six centrifugal compressors. This most recent contract builds upon a previous award for North Field East (NFE) expansion and will bring the overall number of Qatari LNG train driven by Baker Hughes compression to 12 (OGJ Online, Sept. 29, 2020).
North field is the world’s single largest non-associated natural gas field. The NFS project is the second phase of the North Field Expansion project, announced in 2017. When fully completed, it will increase Qatar’s LNG production from 110 million tpy, which will be achieved by the end of NFE’s first phase in 2025.
QatarEnergy last year selected ConocoPhillips Co. as its third and final NFS international partner. TotalEnergies SE and Shell PLC are the other partners, holding a combined 25%.
Cheniere requests FERC authorization to build Corpus Christi LNG Trains 8-9
Cheniere Energy Inc. has applied to the US Federal Energy Regulatory Commission (FERC) for authorization to site, construct, and operate its 3-million tonne/year (tpy) Corpus Christi Liquefaction (CCL) Midscale 8-9 expansion at Cheniere’s existing 15-million tpy Corpus Christi LNG plant in San Patricio and Nueces Counties, Tex., along the La Quinta ship channel. The project will include two 1.5-million tpy liquefaction trains.
The application also asked for an increase in the authorized loading rate of LNG carriers visiting the plant and the addition of certain refrigerant, end flash and boil-off gas equipment designed to manage integrated operations once the expansion is placed in service. Cheniere, which entered FERC National Environmental Policy Act prefiling for the two trains last year, requested that FERC grant the current application by Sept. 27, 2024 (OGJ Online, Aug. 31, 2022).
The company took final investment decision (FID) on its 10-million tpy CCL Stage 3 expansion in June 2022 and issued full notice to proceed with construction to lead contractor Bechtel Corp. It expects to bring this capacity online late 2025, with Trains 8-9 to follow.
Cheniere’s CCL Stage 3 expansion is one of three liquefaction capacity additions the Energy Information Administration expects to come online by end 2025, joining QatarEnergy and ExxonMobil Corp.’s 18-million tpy Golden Pass LNG plant near Port Arthur in Jefferson County, Tex., and Venture Global LNG Inc.’s 20-million tpy Plaquemines LNG plant in Plaquemines Parish, La. (OGJ Online, Feb. 3, 2023).
Shaanxi LNG awards Technip liquefaction FEED contract
Shaanxi LNG Reserves & Logistics Co. Ltd. has awarded Technip Energies NV a contract to provide the process-design package, front-end engineering and design, and key equipment for a single 0.8-million tonne/year (tpy) liquefaction train as part of the 3-million cu m/day Xi’An LNG Emergency Reserve & Peak Regulation project in China.
The contract also covers technical services for construction, commissioning, startup, and performance testing.
Xi’An LNG will use Air Products and Chemicals Inc.’s single mixed refrigerant (AP-SMR) liquefaction which will be all-electric motor-driven, according to Technip.
The company added that it will be the largest liquefaction unit in the world using a single electric motor-driven mixed refrigerant compressor and that this will make it a reference point in terms of low-carbon LNG production.