Industry Briefs

March 20, 2000
A gasoline spill of 12,000 bbl was contained Mar. 10 about 10 miles north of Greenville, Tex., after leaking from a pipeline owned by Explorer Pipeline Co., Tulsa.


A gasoline spill
of 12,000 bbl was contained Mar. 10 about 10 miles north of Greenville, Tex., after leaking from a pipeline owned by Explorer Pipeline Co., Tulsa. Explorer had removed and replaced the 170-ft section of damaged pipe and refilled the line by Mar. 15, said Explorer Pres. and CEO Scott Van Dyke. Late last week, the firm received clearance from the US Department of Transportation to restart the system at a reduced level. Explorer had shut down the 28-in., 700,000 b/d southern section of the Houston-to-Tulsa pipeline after finding the leak Mar. 9. The spill occurred in a rural area, and no injuries were reported. The National Transportation Safety Board is examining the spill's cause.


About 200 people
were exposed to phosgene gas accidentally released from the Thai Polycarbonate Co. chemical plant in the Map Ta Phut industrial complex at Rayong, Thailand, the Bangkok Post reported. One person died, and several dozen others were injured. The chemical is highly toxic after prolonged exposure. The plant has been closed for 30 days so that the incident can be investigated.

China Petrochemical Development Corp.
will begin commercial production at its new 120,000-tonne caprolactam plant at Kaohsiung, Taiwan, at the end of March. Construction of the $390 million facility began 3 years ago; trial production started at the end of 1999. CPDC operates two other caprolactam plants: a 60,000-tonne unit in central Taiwan and a 50,000-tonne unit at Kaohsiung.

China Petrochemical International Co.
let contract to Stone & Webster International Projects Corp. for expansion and revamp of Shanghai Petrochemical Corp.'s (SPC) No. 2 ethylene plant. The project will increase the plant's capacity to 700,000 tonnes/year from 400,000 tonnes/year by 2002. The work involves Stone & Webster-Mobil Corp. Advanced Recovery System technology. Stone & Webster will be responsible for the process design package, basic engineering design for the recovery section, and design liaison services to SPC during the engineering phase.


Repsol-YPF SA
and Enagás-the transportation unit of Spain's Gas Natural Group-signed an initial 20-year charter for three new 138,000 cu m LNG carriers. The charters were signed with shipbuilders Elcano, Naviera F. Tapias, and Knutsen Oas Shipping. These vessels, to be constructed by Astilleros Españoles SA and launched under a time-charter contract, will be used to carry LNG from Trinidad and Tobago to Spain (OGJ, Aug. 9, 1999, p. 24).


Samedan Mediterranean Sea,
a unit of Noble Affiliates Inc., Ardmore, Okla., and its partners made a natural gas discovery off Israel. Mari B-1, drilled in 795 ft of water 15 miles offshore, reached 6,830 ft TD and cut 550 ft of gas pay in a single zone. The well follows the Noa 1 discovery 8 miles to the west (OGJ, July 5, 1999, p. 29). In a test of an 89-ft section of the zone, the well flowed 33 MMcfd through a 48/64-in. choke with 2,060 psi flowing tubing pressure, restricted by equipment. A confirmation well is to be drilled 1 mile east of the discovery. Partners in the well are operator Samedan (40%), Avner Oil Exploration LP (21.39%), Delek Drilling LP (23.61%), and R&B Falcon Corp. unit RB Mediterranean Ltd. (15%).


Pulse Energy,
a new $1 billion (Aus.) energy retailer being backed by Shell Australia Ltd., Woodside Petroleum Ltd., and United Energy, was established to accelerate the pace of change among Australia's electricity and gas utilities. The new venture will concentrate initially on the Victoria market before looking to expand into New South Wales and Queensland. United Energy-which is majority-owned by a 50-50 joint venture of UtiliCorp United and AMP Ltd. called Energy Partnership-plans to serve its 560,000 electricity customers through Pulse.

Santos Ltd.,
Adelaide, South Australia, acquired several Carnarvon basin oil and gas assets from Shell Development (Australia) Pty. Ltd. for about $240 million (Aus.). Acquired were a two-sevenths interest in the Barrow Island joint venture; a five-fourteenths interest in the Thevenard Island joint venture; a two-sevenths interest in the WA-213-P exploration permit; and various interests in exploration acreage related to the Barrow and Thevenard Island JVs. The assets hold a combined 43 million boe of proved and probable reserves, says Santos.

Lundin Oil AB,
Stockholm, plans to acquire all of the issued and outstanding common shares of Red Sea Oil Corp., Vancouver, BC, that it does not now hold. Lundin currently holds 61% of Red Sea. The two firms had opened merger talks earlier this year (OGJ, Jan. 24, 2000, p. 31). Based on the merger agreement, Red Sea shareholders will receive 0.47 Series B shares of Lundin Oil for each common share of Red Sea. Among its most desirable assets, Red Sea operates and holds a 60% interest in Area NC177 in Libya; Lundin holds a 40% interest. Production from the area's En Naga field, which holds about 90 million bbl of oil reserves, is expected to start during first quarter 2001.

Fortum Oil & Gas Oy
made agreements with Norsk Hydro AS and BP Amoco PLC to swap production licenses in the Norland VI area southwest of Lofoten on the Norwegian continental shelf. Subject to approval of authorities, Fortum will enter into PL219 with 10% and into PL220 with 15%. The first well will be drilled on PL220 this year.

Equitable Resources Inc.,
Pittsburgh, signed a deal to combine its Gulf of Mexico exploration and production unit with Westport Oil & Gas Co., Denver. Based on the transaction, Equitable will receive about $50 million in cash, a large minority interest in Westport, and equal representation on Westport's board. Equitable says it will use cash from the deal to finance its acquisition of Statoil Energy Inc.'s Appalachian assets and for potential share repurchases (OGJ, Feb. 14, 2000, p. 74). Westport's gulf operations will be run from Houston, where both companies' gulf operations are based.

UtiliCorp United unit
Aquila Energy Corp., Kansas City, will acquire the marketing assets of US Gas Transportation Inc. (USGT), Dallas. Following closing of the deal, USGT will operate under the name USGT/Aquila LP. Through the purchase of USGT, Aquila will expand its natural gas management and marketing operations in the Western US, it said.


Caltex Corp.,
the Asian joint venture of Chevron Corp. and Texaco Inc., began operation of an LPG terminal and storage tanks in southern China's Guangdong province. The $100 million project was initiated in 1995, with construction started a year later at the port city of Shantou. The project includes two 100,000 cu m underground LPG tanks for butane and propane storage. It also incorporates an LPG receiving terminal with three berths. One berth has a handling capacity of 50,000 tonnes and the other two, 5,000 tonnes each. The terminal can accommodate a maximum LPG throughput of 2 million tonnes/year, but during the initial operation stage, Caltex expects it to handle only 500,000 tonnes/year.


Coastal Corp.
unit ANR Pipeline Co., Detroit, received approval from the US Federal Energy Regulatory Commission to build and operate the first phase of its Wisconsin 2000 expansion project. The projected cost of Phase I is $23.8 million, which will include the installation of an additional 20,000 hp at its Woodstock, Ill., compressor station. The extra compression will enable ANR to transport another 109 MMcfd of natural gas from the Joliet, Ill., hub to markets in Wisconsin. An in-service date of November 2000 is anticipated (OGJ, Mar. 15, 1999, p. 30).

China National Petroleum Corp.
(CNPC) started construction of an oil products pipeline from northwestern China's Gansu province to Sichuan and Chongqing in the southwest. The 1,200-km, 5 million tonne/ year line is scheduled for completion in June 2002. Feed will come from CNPC's two refineries in Lanzhou, which have combined capacity of 7.5 million tonnes/year. Currently, oil products supply for Sichuan and Chongqing is provided by refineries in South China via railway. The government has approved the pipeline's construction as part of the country's strategy to step up economic development in western China.


Phillips Petroleum Co.
reported increased output from Elang oil field on the ZOCA 91-12 permit in the Timor Gap Zone of Cooperation between Australia and Indonesia. The Elang 1/ST1 sidetrack was connected to production facilities and is producing 20,000 b/d. Elang 1, which is now abandoned, produced 3,000 bo/d. Interest holders are operator Phillips (42.417%), Santos Ltd. (21.426%), Inpex Sahul Ltd. (21.209%), and Petroz Group 14.948%.

The Shearwater development project,
a high pressure, high-temperature field 200 km east of Aberdeen in the UK North Sea, reached completion of its drilling and construction phase after the installation of an integrated deck earlier this month (OGJ, Sept. 20, 1999, p. 68). Shearwater partners are operator Shell UK Exploration & Production, 28%; ExxonMobil Corp., 44.5%; and ARCO British Ltd., 27.5%. Production from the field, which is expected to reach 410 MMcfd of natural gas and 90,000 b/d of condensate, is anticipated to start in July.

EEX Corp.,
Houston, let contract to Energy Resource Technology, a unit of Cal Dive International Inc., Houston, for management of four EEX-operated blocks on the Outer Continental Shelf in the Gulf of Mexico. EEX workers managing those properties will become employees of Energy Resource, which also acquired EEX's interest in six other offshore blocks for $4.9 million and assumption of its share of abandonment liability. Those properties are producing 23 MMcfd and include 13 wells, 5 platforms, and a caisson.

Elf Exploration Angola
agreed to amend its drilling contract on the Sedco Express newbuild semisubmersible, which is being constructed by a Transocean Sedco Forex Inc. (TSF) subsidiary. The contract was amended to prevent possible termination of the agreement due to late delivery, now slated for Dec. 28, 2000-7 months later than planned. The amended contract also allows TSF to recover a maximum of $3.7 million of the revenue reduction during the initial 6 months of operation. Expected revenues to be generated over the 3-year contract have been reduced by $23 million to about $165 million.

PanCanadian Petroleum Ltd.,
Calgary, let a $41 million (Can.) drilling contract for a project off Nova Scotia to Rowan Cos. Inc., Houston. The Gorilla III and Super Gorilla V rigs will operate for up to 1 year in Cohasset and Panuke fields near Sable Island. Two test wells drilled at a location 20 miles from Sable Island produced at a combined rate of about 107 MMcfd.


Kazakhstan state oil firm Kazakhoil
let a $427,000 contract to Gustavson Associates, Boulder, Colo., to study the development of Alibekmola, Kozhasay, and Urikhtau fields near Aktobe in central Kazakhstan. World Bank will provide funds for the contract. The oil and gas fields were discovered during the Soviet regime and never developed. Existing oil and gas pipeline systems extend from the area of the fields north to power and petrochemical plants.

Coastal Corp.,
Houston, signed a long-term operating and processing agreement with Citgo Petroleum Corp., Tulsa, for Coastal's 100,000 b/d Corpus Christi refinery, which is near a Citgo-owned refinery. "We believe there are synergies between the two refineries, which will have a combined capacity of 265,000 b/d, that will make Citgo more competitive in the marketplace and benefit the long-term viability of the combined refinery operations," said Citgo Pres. and CEO David J. Tippeconnic. The firms expect to reach a definitive agreement by the end of the second quarter. Citgo is owned by PDV America Inc., which is an indirect, wholly owned subsidiary of Petroleos de Venezuela SA.

a joint venture of Vietnamese state oil firm Petrovietnam and Russia's Zarubezhneft, chose Institut Français du Pétrole's R2R technology for a residue catalytic cracking unit for the refinery it is building at Dung Quat, Viet Nam. The unit, slated for start-up in 2003, will be part of the first refinery to be built in Viet Nam. The unit will upgrade 69,700 b/sd of atmospheric residue to product transportation fuels.

Gas supply

ExxonMobil Corp.
revised its wait-and-see attitude towards the Papua New Guinea-Queensland gas pipeline project by agreeing in principle to adding its Hides field gas reserves to the venture. ExxonMobil owns 50% of Hides in the Papua New Guinea highlands, and through the Mobil merger it now also holds an interest in the Kutubu oil fields.

Gas processing

Sweetwater Operations Ltd.,
a unit of Syntroleum Corp., Tulsa, let contract to UOP LLC, Des Plaines, Ill., to design a Molex unit for its gas-to-liquids plant on the Burrup Peninsula in Western Australia (OGJ, Feb. 28, 2000, p. 37). The unit will be the first to produce and separate normal paraffins from a Fischer-Tropsch-produced feed and is expected to start up by 2003, says UOP. The plant will convert natural gas to specialty products such as lubricating oils, naphtha, paraffins, and drilling fluids. Syntroleum holds a majority interest in the project; Methanex Corp., Vancouver, BC, and Enron Corp., Houston, hold the rest.