INDUSTRY BRIEFS

Sept. 25, 1995
TransAlta Energy Corp.,Calgary, is investing $110 million (Canadian) in a $335 million gas fired cogeneration plant on New Zealand's North Island. The project is TransAlta's fourth New Zealand power investment and its second in a gas fired plant. The 350,000 kw Taranaki plant is to go on stream in mid-1998. Other partners are Fletcher Challenge Ltd. and Mercury Energy Ltd. Rain Calcining Ltd.

Cogeneration

TransAlta Energy Corp.,Calgary, is investing $110 million (Canadian) in a $335 million gas fired cogeneration plant on New Zealand's North Island. The project is TransAlta's fourth New Zealand power investment and its second in a gas fired plant. The 350,000 kw Taranaki plant is to go on stream in mid-1998. Other partners are Fletcher Challenge Ltd. and Mercury Energy Ltd.

Rain Calcining Ltd.acquired $23.65 million in financing from International Finance Corp. for construction of a cogeneration plant and petroleum coke calciner at Visakhapatnam port in India. Rain Calcining will produce 49,000 kw of power and 150,000 metric tons/year of calcined coke. The coke will supply regional aluminum markets, and electricity will be sold to local industrial users under an arrangement with Andhra Pradesh State Electricity Board. The $94 million project is a joint venture of N. Jagan Reddy, Houston Industries Energy Inc., Aimcor USA, and other investors.

Chevron U.S.A. Products Co.and GE Capital let contract to a unit of Fluor Daniel for engineering, procurement, and construction of a 48,000 kw combined cycle cogeneration plant at Chevron's 230,000 b/d El Segundo, Calif., refinery. GE will lease the plant to Chevron upon completion in mid-1996.

NGL

Enterprise Products Co., Houston, completed preliminary design for a 45,000 b/d expansion of the joint venture natural gas liquids fractionator it operates at Mont Belvieu, Tex. Completion of the project, scheduled for fourth quarter 1996, will increase capacity to more than 200,000 b/d. Partners in the fractionator with Enterprise are Enron Natural Gas Liquids Corp., Meridian Oil Hydrocarbons Inc., Texaco Exploration & Production Inc., and Union Pacific Fuels Inc.

Exploration

Norway's Den norske stats oljeselskap AS plans to drill a well on its Siri prospect off Denmark early in November. The Deepsea Bergen semisubmersible will operate in 60 m of water to drill the well, which will test a structure 2,000 m below the seabed. The well will be on a block awarded to Statoil during Denmark's fourth exploration licensing round this year (OGJ, Apr. 24, p. 42).

Khalda Petroleum Co. tested a gas/condensate discovery at its 1X South Salam wildcat on Egypt's Khalda concession. The well, drilled to 10,115 ft at a site 212 km south of the producing Salam oil field, flowed a combined 45.1 MMcfd of gas and 2,695 b/d of condensate on tests of three zones covering a net 36 ft in Cretaceous Alam El Bueib sandstone. Khalda Petroleum is a combine of Repsol Exploracion Egipto SA, Samsung Co. Ltd., Egyptian General Petroleum Corp., and a unit of Phoenix Resource Cos. Inc., Oklahoma City.

Conoco Norway Inc. found Paleocene sandstone oil in Block 25/7 of the Norwegian North Sea with its 25/7-2 wildcat. Norwegian Petroleum Directorate (NPD) said the well was drilled to 2,571 m vertical depth by the Deepsea Bergen semisubmersible operating in 125 m of water. The well flowed 4,655 b/d of oil and 1 MMcfd of gas through a 25 mm choke. NPD also said the discovery may be part of a reservoir discovered earlier by Conoco with its 25/8-5S well.

Cox & Perkins Exploration Inc., Houston, and partners calculated the open flow potential of 1 Gold-Zapp-Mollnar Unit wildcat in Wharton County, Tex., at 72 MMcfd of gas with a condensate ratio of 38 bbl/MMcfd from perforations at 8,380-86 ft in Eocene Downdip Expanded Yegua sands. Flowing pressures on a four point test of the well using 464 in.-764 in. chokes were 5,761-65 psi.

Ireland's exploration ups and downs continued with a report by Marathon Petroleum Hibernia Ltd. of a noncommercial oil discovery at its Block 50/6-3 well drilled off Southeast Ireland. The well was drilled by the Kan Tan IV semisubmersible operating in 237 ft of water. Last month, Marathon found a small gas field, which it has marked for development as a subsea satellite of an existing platform (OGJ, Sept. 4, p. 38).

Companies

Russia's Lukoil raised $320 million through an international placement of securities, the largest by a Russian company, London's Financial Times reported. The newspaper said a $250 million investment will give ARCO a 5.6% interest in Lukoil (OGJ, Sept. 4, Newsletter). The other $70 million was taken up by institutional investors. Of the total raised, $226 million will be used to pay taxes owed to government, which is cracking down on corporate tax evasion.

The French government owns a 9.92% interest in Elf Aquitaine, not 55.8% as reported earlier (OGJ, Sept. 4, p. 74). Elf was privatized in February 1994.

ARCO is meeting resistance to its takeover bid for Aran Energy plc, Dublin. Aran said ARCO wants to acquire Aran's interest in Schiehallion field, currently under development in the West of Shetland frontier, but is undervaluing the asset to Aran shareholders. Next move in the bid will be Aran's Oct. 3 publication of an independent valuation of its assets.

Ashland Inc. will take a one time pretax charge of about $130 million against fourth quarter earning related to its adoption of a new accounting standard and revision of its estimate of a previously disclosed charge tied to its Ashland Petroleum unit's early retirement program. The new accounting standard reduces the value of certain Ashland assets, causing a $90 million writedown. As for the $40 million for the early retirement program, 321 employees accepted the package vs. the 250 positions Ashland sought to eliminate.

Gulf Canada Resources Ltd. offered to acquire all outstanding common stock of fellow Calgary companies Czar Resources Ltd. and Orbit Oil & Gas Ltd. in deals worth a combined $193 million (Canadian).

Pipelines

Westcoast Energy Inc., Vancouver, B.C., agreed in principle to acquire Czar's and Orbit's interests in the Czar operated pipeline in the Helmet area of Northeast British Columbia. Czar will receive $10 million (Canadian) for its 33.3% interest and Orbit $6.5 million for its 21.% interest. Westcoast will seek to acquire other working interests in the line for a total $30 million.

Midcoast Energy Resources Inc., Houston, bought Magnolia Pipeline Co. from a unit of Williams Cos. Inc., Tulsa, including 81 miles of 24 in. pipe, 16 miles of 16 in., 12 miles of 6-12 in., and a 1,340 hp compressor station in Central Alabama. The 650 MMcfd Magnolia system connects coal seam gas wells in the Black Warrior basin with Transcontinental Gas Pipe Line Corp.'s main line upstream of Transco's Station 100. Midcoast's Tuscaloosa pipeline system ties Magnolia to markets in the Moundville, Ala., area.

Drilling-production

Statoil delayed start-up of Yme field on Norwegian Sea North Sea Block 9/2 by about a month and now expects first oil in mid-November. Statoil blamed the postponement on delays in converting the Maersk Giant jack up to a production unit. Tow-out has been rescheduled for Oct. 15, after which Statoil expects the first production well to be complete in 3 weeks. Yme reserves are estimated at 36 million bbl of oil. An 11 million bbl satellite reservoir was found recently and earmarked for development (OGJ, Sept, 18, p. 34).

Mitchell Energy & Development Corp., The Woodlands, Tex., acquired a 100% working interest in Lake Creek field of Southeast Texas from Mobil Exploration & Producing Inc., Amoco Production Co., and Amerada Hess Corp. for $26 million. Included are 32 wells and related gathering, treating, and processing assets in Montgomery County, Tex., adjacent to Mitchell's Pinehurst field. The company aims to boost Lake Creek gas production with the same methods used to increase Pinehurst output by 16 MMcfd to a total of 20 MMcfd and 500 b/d of oil from 21 wells. Nineteen Lake Creek wells are producing 5 MMcfd of gas and 300 b/d of oil on the same 20 mile long anticline as Pinehurst.

Falcon Drilling Co. Inc., Houston, closed its purchase of the first of five bottom supported drilling rigs from Sonat Offshore Drilling Inc., also of Houston. Completed was the purchase of the Offshore Taurus, D-F 84, and D-F 86 rigs, all based in the Gulf of Mexico. Sonat expects to close the sale of the two remaining rigs, D-F 77 and D-F 85, to Falcon by the end of the month.

Saba Petroleum Co. Irvine, Calif., unit Sabacol Inc. acquired from a Texaco Inc. unit a 25% interest in the producing Teca and Nare oil fields in Colombia. The fields produce 12,000 b/d of oil from about 300 wells. Production will be shared 50-50 between Sabacol/Omimex de Colombia Ltd. and state owned Empresa Colombiana de Petroleos. (Ecopetrol). Omimex will become operator early in October. Included in the deal are exploration and development prospects. Sabacol and Omimex also acquired a 100% interest in the 189 km Velasquez-Galan pipeline that moves about 27,000 b/d of oil to Ecopetrol's Barrancabermeja refinery.

BHP Petroleum Pty. Ltd. plans in October to shut down its Griffin Venture production ship in Griffin field, 68 km northwest of Onslow, Western Australia. On Oct. 6 the ship will sail to Fremantle Harbor for 20 days of routine maintenance. During the shutdown, the onshore gas processing plant near Onslow will undergo minor modifications. Work is expected to cost $5.3 million.

Soekor (Pty.) Ltd. let contract to Sedco Forex to manage Soekor's semisubmersible rigs Omega, a Bingo 300 design; and Actinia, an enhanced Pacesetter design. Sedco Forex will begin managing the Omega off West Africa in October. Start of Sedco Forex management of the Actinia is subject to a further agreement, depending on its current contract obligations in Southeast Asia.

Flying J Oil & Gas Inc., a unit of Flying J Inc., Brigham City, Utah, agreed to purchase all of the oil and gas exploration and production assets of Cenex Inc., St. Paul, Minn. Involved are about 600 producing oil and gas wells and a leasehold of 500,000 undeveloped acres in the U.S. West. After the sale is complete, Cenex will close its office in Billings, Mont.

Refining

Hess Oil Virgin Islands Corp. shut down its 545,000 b/d St. Croix, Virgin Islands, refinery Sept. 15 to prepare for the approaching Hurricane Marilyn. Processing units were to resume operations during the ensuing 12 days.

The U.S. Justice Department and National Cooperative Refinery Association proposed a consent decree to resolve an environmental complaint against NCRA's 72,200 b/d McPherson, Kan., refinery. The decree requries NCRA to pay a $176,312 penalty and operate a continuous emissions monitoring system installed on two steam boilers at the plant.

Slovnaft AS, Bratislava, Slovak Republic, chose ABB Lummus Global's LC-Fining technology for a residue hydrocracker as part of an upgrade at Slovnaft's 193,000 b/d Bratislava refinery. The unit will convert vacuum residue to lighter products and allow production of residual fuel oil, which can be burned in the refinery's power plant while meeting European emissions rules. Lummus will provide technology license, basic engineering, and operator training for the 40 month project.

Catalysts

Catalyst Recovery of Louisiana Inc. (CRLA), a unit of CRI International, started up the new optiCAT offsite catalyst regeneration process at its Lafayette, La., plant. The process uses air flow and "enhanced circulation" to remove most sulfur and reactive carbon from spent catalyst. CRLA said the process reduces residence times and catalyst attrition.

Petrochemicals

Borealis AS, a joint venture of Norway's Statoil and Finland's Neste Oy, claims improved properties with two new polypropylene grades. One is a nucleated polypropylene Borealis said owes its improved tensile and flexural properties to a new catalyst technology. The other has improved impact resistance, the company said, making it suitable for injection molding applications where high density polyethylene is the norm.

Japan's Mitsubishi Oil Co. and Kyushu Oil Co. plan to build a 300,000 metric ton/year paraxylene plant on Kyushu island. The plant, to be on stream by April 1997, is expected to cost $100 million. Asian demand for paraxylene, a feedstock for polyester, is expected to grow more than 10%/year the next 10 years. The price for paraxylene has jumped 150% in 2 years.

Japanese petrochemical firms Tosoh Corp., Mitsui Toatsu Chemicals Inc., and Denki Kagaku Kogyo KK plan to combine their polyvinyl chloride resin businesses into a single company. The new combine is to be operational in April 1996. Total PVC production capacity of the company will be 580,000 metric tons/year, making it Japan's largest PVC producer.

Marketing

Statoil bought Conoco Ireland Ltd.'s retail service station network, making it the largest products retailer in Ireland. The deal covers 257 service stations Conoco currently operates under its Jet brand. As of Jan. 1, 1996, Stat- oil will add the Conoco outlets to its existing chain of 180 outlets. This will give it a market share of about 25%, a boost from its current position of fifth or sixth in the market with a share of 11%. The combined network will continue to be fed by Statoil's Mongstad, Norway, refinery. Copyright 1995 Oil & Gas Journal. All Rights Reserved.