INDUSTRY BRIEFS

LNG

NORTHWEST SHELF liquefied natural gas export project partners will increase LNG sales to Japanese customers by about 498,000 metric tons/year (see related story, p. 32). Under a current 20 year contract, Japanese utilities purchase 7.02 million tons/year of Northwest Shelf LNG. The increase jumps that to 7.5 million tons/year through 2009.

LPG

JAPAN'S Mitsui & Co. reportedly is pulling out of a $420 million liquefied petroleum gas export project in Viet Nam, while British Gas plc plans to scale down its share. The project calls for building an offshore gas compression platform and pipeline, onshore terminal, and LPG plant, with natural gas from the scheme also being used to generate electrical power (OGJ, Nov. 28, 1994, p. 23). Mitsui's withdrawal apparently stems from doubts over the project group's ability to bring first gas ashore by 1997 to meet a Hanoi deadline. British Gas is expected to submit an alternative proposal for a $270 million project consisting of only the LPG plant and terminal.

COMPANIES

KERR-MCGEE CORP. is restructuring its exploration and production division and laying off staff as a result of selling about half its oil and gas producing fields, mainly onshore in the U.S. and Canada. About 120 jobs, or 15% of Kerr-McGee's total E&P work force, will be cut in Oklahoma, Texas, Louisiana, New Mexico, and Canada.

INUVIALUIT PETROLEUM CORP. obtained tenders for more than 69% of shares of Omega Hydrocarbons Ltd. and is expected to complete a takeover. Inuvialuit increased its offer to $2.90 (Canadian)/ share from $2.75 for a total bid of about $61 million, including assumption of about $20.8 million in Omega debt (OGJ, Nov. 13, p. 44). Omega said the market is open until Nov. 20 for new bids, but it does not expect higher offers. Omega produces about 2,300 b/d of oil and 12 MMcfd of natural gas. Both are Calgary companies.

CALGARY oil field supply firms Franklin Supply Co. Ltd. and Continental Emsco Co. Ltd., a unit of SCF Partners, Houston, agreed to merge, forming the largest oil field supply company in Canada. A meeting is scheduled Nov. 21 to rename the company C.E. Franklin Ltd.

INTERA INFORMATION Technologies Corp., Calgary, sold its petroleum division to Schlumberger Ltd.'s Calgary unit GeoQuest for $60 million (Canadian). Intera consults and produces computer software for oil field applications.

GAS STORAGE

AMOCO NETHERLANDS BV will convert the largely depleted Alkmaar gas field in western Netherlands into a peak shaving gas storage site. This will be the first peak shaving project in the country and will be used by state transmission and marketing company Gasunie. Its use is required because of a production decline in super-giant Groningen gas field. The conversion is expected to cost $255 million. The site will have storage capacity of 250 million cu m and delivery capacity of 24 million cu m/day of gas.

DRILLING-PRODUCTION

ABACAN RESOURCE CORP., Calgary, 2 IMA horizontal well flowed 16,800 b/d of 41 gravity oil with 1,660 psi flowing wellhead pressure on test of the C formation in NGO field in Nigeria's Niger Delta. The flow was limited by heat restrictions and flare capacity. The 2 IMA was directionally drilled from the 3 NGO discovery well platform on Block 469 southeast into Block 237. After reaching 10,500 ft true vertical depth, the well was drilled horizontally another 1,300 ft into the C formation.

TEXACO PETROLEUM CO. let contract to a combine of Woodward-Clyde Group Inc.'s SERT SA unit and Smith Environmental's Canonie Environmental Services Corp. for environmental remediation work on acreage it previously operated in Ecuador's Oriente jungle (OGJ, July 10, p. 32). SERT will handle project administration, workovers, plugging and abandonment, and installation of produced water systems leading into transmission lines. Canonie will be responsible for remediating production pits and hydrocarbon contaminated soil from production pads.

TRANSTEXAS GAS CORP., Houston, acquired a 75% working interest in about 42,000 acres in a new gas production area south of Victoria, Tex. It started production from six wells in the area and plans to complete three more soon. Trans-Texas plans to drill as many as 150 wells on the acreage with an expected success rate of 80% at a cost of $120,000/well. The play is exclusively a 3D seismic Miocene prospect at 2,500-4,000 ft. Total project cost, including land acquisition and 3D seismic, is pegged at $19 million. Project finding costs are estimated at 30-40/Mcf.

U.S. MINERALS MANAGEMENT SERVICE proposed a rule to reform the way royalties are set on natural gas produced from federal leases. A government-industry negotiated rulemaking committee proposed MMS use a market based index price in valuing production for royalty purposes. The proposal also simplifies reporting requirements.

DEEPTECH INTERNATIONAL purchased the Treasure Searcher semisubmersible drilling rig from Transocean AS, Tananger, Norway, for $14.5 million. The rig, a second generation unit built to the Aker H-3 design, is laid up in West Africa.

NORWAY'S Den norske stats oljeselskap AS expects first oil production in December from Yme field on Block 9/2 in the Norwegian North Sea. Once the converted Maersk Giant jack up arrives in the field, Statoil reckons it will take 3-4 weeks to complete the first production well and place it on stream. The Poly-saga storage tanker is due in the field 2 weeks before start-up. The 50 million bbl Yme oil field will be Norway's smallest stand alone development.

BP EXPLORATION OPERATING CO. LTD. will take over from Lasmo plc, London, a 1% interest in North Sea Forties field and a 15% interest in North Sea Beatrice field and receive a waiver of future liability in the Ross discovery. In return, Lasmo will receive a waiver of its obligations for developing Columba field and a balancing cash payment of $20 million.

MAGNUM HUNTER PRODUCTION INC., a unit of Magnum Petroleum Inc., Irving, Tex., closed its purchase of Texas producing properties from an undisclosed Corpus Christi independent for $4.5 million in cash and a note. Proved net reserves are estimated at more than 550,000 bbl of oil and 2.9 bcf in leases with 38 producing wells and 22 horizontal reentry candidates. Magnum also acquired additional acreage nearby for further development.

PETROCHEMICALS

FIVE JAPANESE petrochemical producers plan to reduce ethylene output by 5-10% to the end of March. The cuts are blamed on declining exports to Southeast Asia and a drop in domestic demand since September. The five are Mitsubishi Chemical Corp., Showa Denko KK, Maruzen Petrochemical Co., Idemitsu Petrochemical Co., and Nippon Petrochemicals Co.

UNION CARBIDE CORP. agreed to acquire the polypropylene assets of Shell Oil Co. Included are Shell's polypropylene technology and plants, as well as polypropylene assets previously held jointly by Union Carbide and Shell. The deal is expected to close by yearend. Shell's polypropylene business includes manufacture and sale of polypropylene resins and catalysts, a Norco, La., polypropylene plant, and related research and development facilities at Westhollow Technology Center, Houston, which will be leased by Union Carbide as part of the trade.

MOBIL CHEMICAL CO. started engineering to expand ethylene capacity at its Beaumont, Tex., olefins complex by 40% to 1.8 billion lb/year. The project also is intended to improve operating efficiency and enhance feedstock flexibility. Start-up is slated for 1998. The expanded plant will use the Mobil/Stone & Webster technology.

ALTERNATE FUELS

U.K. GOVERNMENT'S Scottish Office proposed legislation for 1996 to force Scotland's electrical power generators to secure a further 70,00080,000 kw of power from renewable energy sources. An earlier order led to 30 renewable energy projects with combined capacity of 76,000 kw. The preference will be for wind, hydro, waste to energy, and biomass projects limited to a maximum 15,000 kw.

PIPELINES

AGIP (U.K.) LTD. let a $45 million engineering, procurement, installation, and commissioning contract to Rockwater Ltd., Aberdeen, to supply a flow line system for North Sea Thelma field development. Thelma will be developed with subsea wells tied back to Tiffany platform via a manifold. Project sponsors said it will involve the world's longest flow line bundle tieback, with two bundles 5.1 km and 6.6 km long containing 6 in. and 10 in. production flow lines, respectively. Installation is slated for May-July 1996.

CENTANA GATHERING CO., Houston, let a pipelay contract to Allseas Marine Contractors SA, Switzerland, for two pipelines in 42 and 81 m of water in the U.S. Gulf of Mexico. The first is a 20 in., 48 km line between Main Pass Blocks 164 and 225, the second a 12 in., 9 km line between Main Pass Blocks 225 and 223. Three third party pipeline crossings also will be involved in the two jobs. Allseas will perform a subsea tie in at Main Pass 164 and three riser tie-ins, two at Main Pass 225 and one at Main Pass 223.

NORTHERN BORDER PIPELINE CO., Omaha, Neb., hired LlConsult Inc., Houston, to supply pipeline simulation software on a transmission network from Saskatchewan through North Dakota, South Dakota, Iowa, and Illinois. The system consists of 1,560 km of 30 and 42 in. line, seven compressor stations with seven units, and 60 line valves. LlConsult Inc. is a subsidiary of LlConsult AS, Denmark. The real time simulation model to be supplied includes dynamic line inventory calculation, over/under pressure detection, look ahead and predictive modeling, and nomination data. Implementation is to be complete by May 1996.

DIAMOND SHAMROCK completed its 10 in., 409 mile, 27,000 b/d West Texas refined products pipeline and is pumping product through the line. A terminal was to open for commercial business last week. The pipeline, expandable to 50,000 b/d, moves products from Diamond Shamrock's McKee, Tex., refinery to El Paso to help supply gasoline, diesel, jet fuel, and propane to the company's New Mexico and Arizona markets.

ALYESKA PIPELINE SERVICE CO., Anchorage, will lay off 41 workers by yearend as part of a restructuring that began last year and has claimed 300 jobs. The layoffs will cut 22 jobs in Anchorage and 19 in Valdez along the Trans-Alaska Pipeline System. Alyeska is making the cuts to cut costs of owner companies that also are the major producers of oil on Alaska's North Slope, where production is declining.

COLUMBIA GULF TRANSMISSION completed repairs on its Bluewater natural gas pipeline in the Gulf of Mexico and last week took nominations to resume the flow of gas. Maintenance work, to repair a leak found in late July at Columbia's Vermilion Block 96 platform, shut in 600 MMcfd of gas. Work began Oct. 23 but was delayed by rough seas.

GOVERNMENT

PAPUA NEW GUINEA is entitled to begin earning a profit from its 22.5% interest in the Kutubu oil development and export project. That follows the government's discharge last month of an accumulated liability for exploration and development costs of 510 million kina ($383 million) first carried by a group of companies led by Chevron Niugini Pty. Ltd. The first cargo of crude lifted under this basis carne in early November. The government estimates it will earn 1.4 billion kina from sale of its share of crude during 1996-2004. That share is taken by state owned Mineral Resources Development Co., now majority partner in the project.

EXPLORATION

UNITS OF AGIP SPA, Russia's Lukoil, and Pennzoil Corp. signed a definitive exploration, development, and production sharing contract with State Oil Company of Azerbaijan Republic (Socar) covering the Karabakh structure in the Caspian Sea off Azerbaijan. Interests are held by LUKAgip - a venture of Agip and Lukoil - 50%, Pennzoil 30%, Lukoil and Socar 7.5% each, and Agip 5%. The Karabakh structure is north of the Azeri-Chirag-Guneshli Deepwater Unit and outside the Apsheron trend 50 miles offshore in 185 m of water. The work calls for a seismic program and exploratory drilling during an initial term of 3 years, with the exploratory term extendable another 18 months.

CHEVRON CORP. reported an oil discovery on its Haute-Mer concession off Congo. Its 1 Moho Marine wildcat 9 miles west of Nkossa oil field flowed 3,500 b/d and 2,200 b/d through a 28/64 in. choke on production tests of two intervals. Appraisal work is under way. Chevron acquired the exploration rights in this area as part of joining with Elf Aquitaine in developing Nkossa field. Elf operates the Haute-Mer concession. Construction and installation of Nkossa facilities are proceeding on track for first production in mid- 1996.

MOBIL CORP. and Algeria's Sonatrach found oil on Block 433 A near Toggourt, 90 km northeast of Hassi-Messaoud, South Algeria. The wildcat flowed 1,000 b/d of oil from pay at 3,500 m. Total depth is 4,240 m. It is the first confirmation of hydrocarbons on the 12,770 sq km block.

ENVIRONMENT

U.S. ENVIRONMENTAL PROTECTION AGENCY postponed a rule limiting air emissions for hazardous waste generators, treatment, storage, and disposal facilities from Dec. 6, 1995, to June 6, 1996. EPA intends to clarify portions of the rule and is considering amending the rule in ways to increase compliance flexibility and reduce regulatory requirements.

Copyright 1995 Oil & Gas Journal. All Rights Reserved.