INDUSTRY BRIEFS

LNG

TAIWAN'S first purchase of liquefied natural gas from Malaysia was to be delivered to Chinese Petroleum Corp.'s (CPC) Yungan terminal May 24. Under a contract signed Mar. 22, CPC will buy 520,000 metric tons/year for 20 years. Meantime, a decision by Taipei to allow private companies to build and operate power generation plants in Taiwan (OGJ, May 22, Newsletter) is expected to sharply boost the country's demand for LNG. More than half the 22 private companies that have applied for such plants intend to use LNG in their projects.

OILSANDS

SOLV-EX CORP. Albuquerque, and Tri-Star Resources Ltd. hired Charter Oak Capital and its Canadian affiliate Glenpower Investments Inc. to complete $150 million of project financing for an oil/alumina coproduction/upgrader plant to be built on Solv-Ex's oilsands lease near Fort McMurray, Alta. The upgrader originally was intended to produce 10,000 b/d of pipeline quality synthetic crude oil with 64,000 tons of alumina at a cost of $125 million. Plans now call for producing 13,500 b/d of a slightly heavier crude because all early production will be shipped by truck.

DRILLING-PRODUCTION

MOBIL NORTH SEA LTD. let a 5 year contract to Kvaerner FSSL Ltd., London, to provide control systems to predefined specifications. First purchase will be an electrohydraulic control system for development of Nevis field on U.K. North Sea Blocks 9/12a and 9/13a. Mobil plans to develop Nevis with an eight well subsea tieback to Beryl A platform, with first production slated for early 1996. Nevis reserves are estimated at 35 million bbl of oil and 150 bcf of gas.

U.S. DEPARTMENT OF ENERGY corrected a press release it issued on a logging tool licensed from ParaMagnetic Logging Inc. (PML). DOE implied that Western Atlas Logging Services proved the feasibility of the technology (OGJ, May 15, p. 58). "In fact," DOE said in its correction, "PML developed, tested, and proved this innovative technology." In addition, DOE said, its reference to a "blind" well test in Colorado should have said Western Atlas participated in the test.

BELDEN & BLAKE CORP., North Canton, Ohio, agreed to form an exploration venture with and buy producing leases from US Energy Development Corp., Getzville, N.Y. Belden & Blake will take over about 7.5 bcf equivalent of oil and gas reserves. The two companies will explore untested Cambro-Ordovician zones under acreage they own in western New York and drill development wells to Silurian Whirlpool and Devonian Bass Island formations in New York. Seismic work is to get under way in June, development drilling in July.

AN INTERNATIONAL GROUP of companies started work in the producing Colon unit of Venezuela's Zulia state under Petroleos de Venezuela SA's (Pdvsa) marginal fields program. France's Corexland BY, the U.S.'s Nomeco Oil & Gas Co., Argentina's Tecpetrol International SA, and Canada's Wascana Energy Inc. will spend $160 million the next 3 years to drill 15 wildcats and 43 appraisal and development wells to boost unit production to 23,000 b/d from 5,000 b/d.

CHEVRON CORP. agreed with Congo's government to develop Kitina oil field off Congo's coast. Reserves are estimated at more than 100 million bbl of light crude oil. Partners are Agip SpA and state owned Hydrocongo.

COLOMBIA'S Petronorte SA halted production of 23,000 b/d from Zulia oil field under orders from Colombia's Environment Ministry that claimed the company was dumping oil field waste in the Zulia River. A study also found mercury contamination in effluent lines from the field to the river and a failure to control erosion in the field, the ministry said. After failing to obtain a new operating license from the government, Petronorte was required to hand over the field, producing for 30 years, to state owned Empresa Colombiana de Petroleos May 1, but the ministry order obligates it to first undertake an environmental cleanup.

ELF ENTERPRISE CALEDONIA LTD. installed an accommodation platform in U.K. North Sea Claymore field. The 4,500 metric ton module, with room for 250 persons, was lifted into place on Block 14/19 by the M 7000 crane vessel operated by Saipem U.K. Ltd., Aberdeen. Claymore production began in November 1977. The new platform replaces facilities on the existing production platform, providing temporary safe refuge in line with recent U.K. offshore safety legislation. Hookup and commissioning is expected to take 60 days.

ENERGY DEVELOPMENT CORP., Houston, is producing a combined 11 MMcfd of gas and 1,200 b/d of liquids from a 1993 discovery on West Delta Block 57 and a 1994 find on West Delta Block 58, both about 7 miles off Louisiana. Operator EDC holds 95% interests in both tracts. Meantime, the company in third quarter 1995 will install a four pile, six slot platform in 220 ft of water on South Pass Block 47 for a three well program to develop 1993 discoveries on that tract and South Pass Block 34.

BP EXPLORATION OPERATING CO. LTD. installed a 6.5 km flow line bundle in U.K. North Sea Cyrus field. The Block 16/28 field, with original reserves of 13 million bbl of oil, was produced for 2 years beginning in 1990 using a production ship. Now Cyrus is being developed as a two well subsea satellite of Andrew platform, also under development. First oil from Cyrus subsea development is slated for July 1996.

BHP PETROLEUM (ARGENTINA) INC. said commercial gas sales began from Sierra Chata field in Argentina's Neuquen basin. A 3 MMcfd treatment plant in the field takes gas from 10 wells, which is processed for export through an 18 in. pipeline to the gas grid 74 km south. BHP has a 31.1 % stake in the project, which is operated by Petrolera Santa Fe SA.

U.K. DEPARTMENT OF TRADE & INDUSTRY published a draft code of practice on offshore infrastructure aimed at making it easier and cheaper to develop oil and gas fields using third party export pipelines, processing platforms and terminals. Companies have until the end of June to submit comments on the draft.

ENVIRONMENT

A NIGER DELTA SURVEY project got under way to catalogue environmental effects of Nigerian industry on the 70,000 sq km delta. Recent accusations of pollution against oil companies prompted the survey, which was launched in February by Shell Petroleum Development Co. of Nigeria and partners (OGJ, Feb. 13, Newsletter).

U.S. COAST GUARD scheduled a June 15 workshop in Alexandria, Va., to consider revising the process through which it classifies oil spill cleanup groups. The agency plans to revise the program to resolve some operational problems.

MINERALS MANAGEMENT SERVICE proposed a rule changing requirements to prevent hydrogen sulfide releases. The proposed rule makes MMS requirements consistent with an Occupational Safety and Health Administration rule and adds sections concerning hydrogen sulfide flaring and sulfur dioxide concentration levels.

REFINING

PAPUA NEW GUINEA approved plans by PNG Oil Refining Co. Ltd. (ORC) for the country's second refinery, to be built at Kikori on the Gulf of Papua near the terminus of the Kutubu oil development project pipeline. ORC is a joint venture of U.S. firm Galveston-Houston Co., Kikori Investments Co., and local landowner group Kuripuare Pty. Ltd. Project financing for the $75 million, 20,000 b/d refinery is to be in place by yearend. A project agreement for Papua New Guinea's first refinery, at Motukea, Port Moresby, was signed in November 1994 (OGJ, Apr. 18, 1994, p. 22).

STAR ENTERPRISE, Convent, La., let a 3 year contract ending January 1998 to Jacobs Engineering Group Inc., Baton Rouge, to supply general process and engineering services to its 225,000 b/d Convent refinery. Jacobs will provide process engineering, detailed engineering design, procurement, project controls, and related services onsite and at Baton Rouge.

EXPLORATION

OTM INTERNATIONAL DEVELOPMENT INC., Vancouver, B.C., Aktash 104-01 wildcat in Ukraine's Crimea found oil. The deeper of two Miocene oolitic limestone reservoirs flowed sweet, naphtha rich, 25 gravity oil. Plans call for testing the upper zone and moving the rig 1,300 m to spud a second well. The upper zone has average porosity of 23% in 4.5 m of net pay, and the lower zone has average porosity of 25% in more than 3.5 m of net pay. OTM holds rights to 28,000 acres in Crimea (see map, OGJ, Mar. 20, p. 40).

SHELL INDIA PRODUCTION DEVELOPMENT BV signed a production sharing contract as operator in a venture with India's state owned Oil & Natural Gas Commission to explore in Rajashtan. The contract covers onshore Block RJ-ON-90/1, which lies about 750 km north of Bombay and covers 11,000 sq km. The block is north of the Cambay basin, which produces about 120,000 b/d of oil. The venture is committed at first to a 30 month 2D seismic survey. Two optional license extensions of 30 and 24 months would involve drilling and further seismic surveying.

A GROUP that includes Mobil Erdgas-Erdoel GmbH obtained oil and gas exploration rights in the Danish North Sea under Denmark's fourth licensing round. Its license consists of six full and 10 partial blocks covering 2,170 sq km in the Northwest Danish North Sea. Interests in the 6 year license are Mobil 27.5%; RWE-DEA AG, Wintershall AG, and Dansk Olie og Gasproduktion AS 20% each; and EWE AG 12.5%. Danish company Dansk Operatorselskab i-s is operator for the five company group.

PIPELINES

A 70 CM OIL PIPELINE 30 km northwest of Surgut, Russia, ruptured and caught fire May 23, knocking out two power transmission lines, Itar-Tass reported. Emergency crews were attempting to put out the blaze at presstime last week. Cause of the break was being investigated.

OIL THAT SPILLED last summer from a pipeline leak near Usinsk in Russia's Komi republic (OGJ, May 22, p. 30) caught fire this month, burning more than 25 acres, Itar-Tass reported. Firefighters contained the blaze May 20. Cause is unknown. State owned Komineft, which is considering a test burn of about 50,000 bbl of spilled oil as part of its cleanup strategy, denied claims that the fire was intentional.

A GAS PIPELINE in the former Soviet republic of Georgia was ruptured by a bomb explosion last week in an apparent act of sabotage, Interfax reported. The fire was put out in 2 hr, and repairs were expected to take 5-6 days. A 40 m section of the line was damaged. The pipeline is the sole source of gas supplies to neighboring Armenia. The Armenian government, in armed conflict with Azerbaijan over the enclave of Nagorno-Karabakh, blamed Azeri agents for the attack, the 1 6th such incident since May 1992.

RUSSIA'S GAZPROM will participate in a proposed $3 billion, 1,500 km gas pipeline from Turkmenistan to Pakistan, Turkmen Deputy Prime Minister Khyakim Ishanov said. Pakistan and Turkmenistan signed a memorandum in March covering the project and supply of 2 bcfd of Turkmen gas to Pakistan via Afghanistan. Turkmenistan will conduct a prefeasibility study with Argentina's Bridas Sapic. The project cost earlier was reported incorrectly as $8 billion (OGJ, May 9, Newsletter).

BRITISH GAS TRINIDAD LTD. hired Switzerland's Allseas Marine Contractors SA to lay a 40 mile, 24 in. pipeline between Poui oil field compression platform and Dolphin gas field platform off Trinidad. Work will include fabrication and installation of three subsea tap valves and protective covers, a riser at the Poui platform, a Subsea tie-in spool at both platforms, and an upper riser section at the Dolphin platform. Allseas' Lorelay will perform the work in winter 1995-96.

COMPANIES

SUN CO. INC. accepted an offer from a group of Canadian underwriters led by Nesbitt Burns to buy its remaining 55% interest in its Canadian unit Suncor Inc. for $855 million (U.S.).

APACHE CORP., Houston, and DeKalb Energy Co., Calgary, completed their merger (OGJ, Feb. 20, p. 100), following approval May 17 by DeKalb shareholders. DeKalb is now a wholly owned subsidiary of Apache.

FOREST OIL CORP., Denver, signed definitive agreements with Anschutz Corp. and Enron Corp. related to the sale of $45 million of Forest stock to Anschutz Corp., also of Denver, and restructuring of about $62.1 million in debt held by a unit of Enron (OGJ, Apr. 24, p. 34).

CANADIAN 88 ENERGY CORP., Calgary, received payment of $18.4 million (Canadian) from Texaco Inc. for its 9.8% interest in Texaco Canada Petroleum Inc. (OGJ, Apr. 24, p. 34). The proceeds immediately cut Canadian 88's interest expense by $1.7 million/year and helps position the company to buy leases for $15-30 million in its core operating areas of Central Alberta. That is in addition to a 1995 capital budget Canadian 88 has hiked to $30 million from $24 million.

PETROCHEMICALS

EPSILON PRODUCTS CO., Marcus Hook, Pa., let a $70 million contract to Fluor Daniel and Fluor Constructors International to build a polypropylene plant at Marcus Hook that will double Epsilon's polypropylene capacity to 720 million lb/year. Fluor Daniel will provide engineering and procurement, and Fluor Constructors will provide construction services. Work is to begin early in June and be complete late in 1996.