Industry Briefs

Oct. 30, 1995
Elf Aquitaine withdrew from an international group studying the proposed Shanghai Pudong joint venture refinery in China after completion of the project's feasibility study begun 3 years ago. Elf said only that the decision was based on an analysis of the world refining industry (OGJ, Nov. 16, Newsletter). Lagoven SA

Refining

Elf Aquitaine withdrew from an international group studying the proposed Shanghai Pudong joint venture refinery in China after completion of the project's feasibility study begun 3 years ago. Elf said only that the decision was based on an analysis of the world refining industry (OGJ, Nov. 16, Newsletter).

Lagoven SA will increase processing capacity of high sulfur heavy crudes at its Amuay, Venezuela, refinery hydrodesulfurization complex to 250,000 b/d from 190,000 b/d. The project will boost output of low sulfur distillates and gas oil. During first half 1995, Lagoven processed 102,000 b/d of heavy crude at Amuay. Installation of new units will boost that to 170,000 b/d in the medium term.

Colombia's Empresa Colombiana de Petroleos started up a 35,000 b/d fluid catalytic cracker at its 173,000 b/d Barrancabermeja, Colombia, refinery. It uses UOP's FCC technology and includes a C2 recovery unit featuring a cryogenic section with turboexpander to bolster energy recovery. Italian-Colombian combine Tipel was project contractor.

Castle Energy Co., Radnor, Pa., will close its 86,000 b/d Lawrenceville, Ill., refinery after a proposed purchase by a company formed by Castle Pres. William Sudhaus collapsed for lack of financing (OGJ, June 5, p. 28). Castle also had failed to find someone to buy intact its mothballed 49,500 b/d Santa Fe Springs, Calif., refinery, which is being dismantled for shipment to and reassembly in India (OGJ, Oct. 9, p. 45).

Cogeneration

CSW Energy, Dallas, agreed with Phillips Petroleum Co. to build a 300,000 kw cogeneration plant at Phillips' Sweeny, Tex. refinery/petrochemical complex. It will supply steam and electrical power to the complex and be fueled with a blend of natural gas and refinery residue gas. Excess power will be sold. Construction will begin after the first of the year, with commercial operation of the new plant scheduled for early 1998.

Petrochemicals

Citgo Petroleum Corp., Tulsa, plans to upgrade and expand its Corpus Christi, Tex., cumene unit to use the Mobil/Badger zeolite catalyst cumene process. Unit capacity is to be increased to an initial 1.1 billion lb/year from 825 million lb/year, expandable to 1.5 billion lb/year with minor debottlenecking. The project's first phase is to be complete in fourth quarter 1996.

Exxon Chemical Co. and Esso SAF are spending 400 million francs to boost capacity of olefins, especially propylene, at Esso's 140,000 b/d Port Jerome refinery and Exxon Chemical's Notre Dame de Gravenchon olefins complex, both in France. Plans call for expanding capacities of Esso's 28,000 b/d cat cracker and Exxon Chemical's steam cracker, which can produce 400,000 metric tons/year of ethylene and 300,000 tons/year of propylene. Work is to begin in March 1996 and be complete in June 1997. Foster Wheeler holds a contract for engineering and construction, overseeing a single team at the adjacent plant sites.

Zaver Chemicals Ltd. (Islamabad) will receive a $15.5 million loan from Saudi Arabia's Islamic Development Bank of Jeddah to partly finance its proposed $100.92 million, 50,000 metric ton/year polyvinyl chloride plant at Port Qasim, Pakistan. Start-up is slated for 1997. The Saudi bank loan will be used to import equipment for the project. The balance of financing will come from a public offering, bank loans, and cash flow of Zaver's parent holding company.

Drilling-production

Chevron Corp. unit Cabinda Gulf Oil Co. Ltd. let a $200 million, 4 year contract to Halliburton Energy Services covering multiple services in the Cabinda concession. The contract has two additional 1 year options for a potential value of $300 million. Halliburton will provide wireline logging, cementing, testing, and completion products and services for a number of major development projects planned and under way off the Angolan enclave,

Fountain Oil Inc., Houston, completed talks with Albanian state oil company Albpetrol over a joint venture to redevelop Gorisht-Koocul oil field in western Albania near the Adriatic port of Vlora. Fountain will serve as operator and find financing for field redevelopment. The field produces about 1,200 b/d from 160 wells. After adjustments for field decline and investment recovery, increased oil production will be shared 50-50. Remaining reserves are pegged at more than 22 million bbl. Start-up is slated for early 1996.

Beau Canada Exploration Ltd., Calgary, hired Kobayashi & Associates Ltd. to sell six properties in Alberta with a net present value of $21.3 million (Canadian) for proved reserves, discounted at 15%. The leases are in the Provost/Coronation, Atlee, Long Coulee, Retlaw/Turin, Mitsue, and Hanlan areas.

Pride Petroleum Services Inc., Houston, agreed to acquire Marlin Colombia Drilling Co. Inc. from Shell Overseas Trading Ltd. Marlin owns six drilling/workover rigs in Colombia.

Elf Enterprise Caledonia Ltd. started operations at an accommodation platform in Claymore field on U.K. North Sea Block 14/19. Installed last May, the platform consists of a 3,300 metric ton, four leg jacket and 4,500 ton quarters for 250 crew. The platform is bridge linked to Claymore production platform, installed in 1977, and replaces old quarters on the production platform deemed unsafe under U.K. safety law.

Unocal Thailand signed a letter of intent with Smedvig Offshore Asia covering use of Smedvig's T-7 and T-4 mobile drilling rigs off Thailand under separate contracts worth a combined $53.46 million. The T-7 deal is for 5 years and begins in November. The T-4 contract is for 1 year and extends a contract that runs through May 1997.

Oilsands

Syncrude Canada Inc. agreed to license UOP's Unicracking process for use at Syncrude's oilsands complex near Fort McMurray, Alta. It covers conversion of one of Syncrude's five hydrotreaters to a hydrocracker. The Unicracking unit would convert a blend of gas oils derived from tar sands to high quality distillates using a new UOP catalyst. The 75,000 b/sd unit at Fort McMurray would be the world's biggest single train hydrocraker, UOP said.

Companies

Equitable Resources Inc., Pittsburgh, purchased a 30% interest in privately held Houston independent South Coast Exploration Co. Plans call for combining South Coast production operations in South Louisiana with Equitable's gas gathering/ processing unit Louisiana Intrastate Gas Co. The two companies also formed a limited partnership through which Equitable can take working interest positions in South Coast exploration projects.

Marathon Oil Co. formed Marathon Power Co. Ltd. to pursue world projects in the electrical power market. Marathon Power will develop and operate independent power projects, focusing on Latin America and the Asia Pacific region.

Ranger Oil Ltd. hiked its takeover bid for Czar Resources Ltd. to $108.4 million (Canadian), or $1.55/share, from $1.30/share. Czar's board recommended the new offer, which expires Nov. 2, to shareholders and agreed to waive provisions of a shareholder rights plan prior to expiration of the Ranger offer. Gulf Canada Resources Ltd. expects to tender the 1.2 million Czar shares it holds to the Ranger offer. Gulf, which made offers for Czar and its sister company Orbit Oil & Gas Ltd., still is considering its position on the Orbit offer, although Czar was its main target. Gulf offered $1.40/share for Czar and $1.10/ share for Orbit (OGJ, Oct. 9, p. 45). All are Calgary companies.

American Cometra Inc., Fort Worth, closed its purchase of most assets of Hardy Oil & Gas Canada Ltd., Calgary, for $30 million (OGJ, Aug. 21, p. 32).

Gas utilities

Equitable Gas Co., a unit of Equitable Resources Inc., filed with the Pennsylvania Public Utility Commission to begin a 2 year gas marketing pilot program in Pleasant Hills Borough, Pa., under which residential and small commercial gas users will be able to select their supplier. Equitable also is participating in the first such program in the U.S., in Rock Valley, Iowa (OGJ, Sept. 11, p. 25).

Interstate Power Co. and MidCon Gas Services Corp., Lombard, Ill., signed a letter of intent calling for MidCon to provide gas supply portfolio management services under a 3 year agreement beginning Nov. 1. MidCon will manage the Iowa utilitys gas purchase, transportation, and storage contracts totaling about 80 MMcfd of peak day gas deliverability.

Gas de Portugal (GdP) plans to buy an additional 20% interest in local gas distribution company Engigas, hiking its stake in the company to 46.4%. That follows disclosure by British Gas plc and Portugal's Sapec that each plans to sell its 20% interest in Engigas. In addition, Portugal's state oil company Petrogal is likely to sell its 12% interest in Engigas under a strategic retructuring that calls for sale of all noncore assets (OGJ, Oct 16, p. 25). Other shareholders in Engigas are Portguese firms Interfina and Bonanca.

Exploration

OMV (Pakistan) Exploration GmbH found gas on Block 20 in Pakistan's Sindh province. Its 1 Khipro wildcat flowed at a stabilized rate of 36 MMcfd of gas from Lower Goru B sandstone pay at 3,318 m. Pay is the same and gas quality is comparable to the Miano discovery and step-out wells nearby on Block 20. OMV and partners plan to develop the field under a fast track schedule.

Talisman Energy Inc., Calgary, found two gas fields on the southern and northern ends of Northeast British Columbia's Monkman trend. Talisman Numac Boulder a-11-J/93-P-5 flowed 27 MMcfd with 9% acid gas content and is to go on line at 20 MMcfd by yearend. The well was drilled to 10,535 ft and cut 230 ft of Triassic pay. Talisman et al. Murray c-55-I/93-P-14 flowed 34 MMcfd with 23% acid gas content and will go on line at 25 MMcfd by early 1997. It was drilled to 6,171 ft and cut 289 ft of Triassic pay. Of other Talisman Monkman wells, one soon will be tested and four others will spud by early 1996.

Amoco Colombia Petroleum Co. and partners confirmed a large gas discovery in Colombia's Opon association contract area. Their 4 Opon well flowed 58 MMcfd of gas and 1,900 b/d of condensate with 8,121 psi flowing tubing pressure from 1,022 ft of perforations in La Paz pay above 11,500 ft. The well is 1 mile south of 3 Opon, which flowed 45 MMcfd of gas and 2,000 b/d of condensate. Operator Amoco holds a 60% interest in Opon, Hondo Magdalena Oil & Gas Ltd. 30%, and Opon Development Co. 10%.

Morgan Hydrocarbons Ltd. and Canadian Occidental Petroleum Ltd., both of Calgary, agreed to jointly explore a 5 million acre block in Southwest Saskatchewan. Morgan recently signed a lease for the land with the owner, Smart On Resources, Hong Kong. It earlier bought Smart On's producing leases in the area for $80 million (Canadian). Morgan and CanOxy will share exploration costs of $30-40 million/year during the next 3-5 years. CanOxy paid Morgan $15 million for a 50% interest in the block and will pay Morgan's share of the first $10 million spent.

Pipelines

Williams Cos. chose not to exercise its right of first refusal related to Questar Pipeline Co.'s $225 million offer to buy Tenneco Gas' 50% of the Wyoming-California Kern River gas pipeline. Williams holds the other 50% of the 904 mile pipeline

Allseas Group, Switzerland, canceled its contract with Sembawang Shipyard Ltd., Singapore, for conversion of the Solitaire pipelay vessel. Allseas called projected delays in delivery of the vessel unacceptable. The 935 ft vessel, designed to handle deepwater pipelay jobs, has been undergoing conversion for more than 2 years. Allseas now targets completion for yearend 1996 and is negotiating with other shipyards for the job.

Four pipelines agreed to incentive tariffs for crude oil shipped from the Canadian-U.S. border to Salt Lake City. Amoco Pipeline, Frontier Pipeline, Anschutz Ranch East Pipeline, and Chevron Pipeline agreed to tariffs of $3.15/bbl for 0-5,000 b/d, $2.90/bbl for 5,001-10,000 b/d, $2.65/bbl for 10,001-15,000 b/d, and $2.40/bbl for more than 15,000 b/d. The agreement supports an Amoco-Conoco Inc. joint venture to lay a pipeline from Billings, Mont., to Elf Basin, Wyoming. The new line and tariffs are designed to boost supply of crude oil to southern Rocky Mountain refiners.

Alternate fuels

Bellringer Resources Ltd., Calgary, is considering a project to produce fuel grade ethanol and dietary fiber in the Taber area of Alberta. The company is spending $49 million (Canadian) to convert two former distilleries in British Columbia and Saskatchewan to produce ethanol and dietary fiber. A converted refinery near Weyburn, Sask., is to go on stream in early 1996 to produce 20 million l./year of ethanol and 30 million lb/year of fiber. Ethanol Pacific Canada Ltd. agreed to purchase the entire 1996 output of Bellringer's Kelowna, B.C., ethanol plant. Bellringer also is studying a deal with an Alberta oil refiner to blend alcohol with gasoline.

Gas processing

Westcoast Gas Services, Calgary, plans to build, own, and operate a 70 MMcfd capacity gas processing plant at Jedney, B.C. The plant, to be on line in late 1996, will process gas produced by Petro-Canada in the Jedney area. The project includes a 26 km sales gas pipeline to connect with Westcoast's main pipeline. Copyright 1995 Oil & Gas Journal. All Rights Reserved.