Industry Briefs
Gas storage
National Fuel Gas Supply Corp., Buffalo, N.Y., shelved, at least for now, plans for the Laurel fields gas storage project (OGJ, Sept. 12, 1994, p. 45). An open season during August and September failed to produce enough interest to proceed with the project. National originally proposed the project in 1993 to provide 19 bcf of underground gas storage service. It was recently altered to offer market based rates, reduced minimum contract terms, and reduced capacity.
Petrochemicals
Coastal Refining & Marketing Inc., Houston, is negotiating with Chevron Chemical Co. to buy Chevrons petrochemical plant at St. Helens, Ore. Facilities include a 360 ton/day urea plant, a 275 ton/day ammonia plant, a 185 ton/day urea/ammonia nitrate plant, and a 65 ton/day carbon dioxide plant.
BP Chemicals Ltd. increased its interest in a Malaysian polyethylene joint venture plant by acquiring the 15% stake of Idemitsu Petrochemicals Co. This boosts BPs share to 60%, while state oil firm Petronas holds 40%. The Kertih polyethylene plant went on stream last May with capacity to produce 200,000 metric tons/year of high density and linear low density polyethylene. BP holds a 15% interest in a 320,000 metric ton/year ethylene plant at the same site.
BP Chemicals started U.K. court proceedings against Union Carbide Corp. to settle a dispute over polyethylene production technology. BP said it has taken the first step in moves to have the High Court declare that its High Productivity technology does not infringe on Union Carbides Condensing Mode patents.
Drilling-production
Russias Lukoil and Italys Agip agreed to form a joint venture to develop Meleiha field in Northwest Egypt. Agip assigned 30% of its interest in the project to the joint venture. Lukoil is the second Russian firm to return to Egypt after the Soviet collapse. Komineft was approved for an award of the West Ismailia block earlier this year (OGJ, June 12, p. 34).
Leviathan Gas Pipeline Partners LPs Flextrend Development Co. LLC unit received commitments from a group of banks for a $32 million credit facililty. Proceeds will fund its Phar Lap, Spend A Buck, and Spectacular Bid development projects off Louisiana. Flextrend bought the leases this year from its Tatham Offshore Inc. unit (OGJ, July 17, p. 31). Leviathan planned to spud the first well in its Phar Lap project on Viosca Knoll Block 817 this month.
Chinas Yacheng 13-1 gas field in the South China Sea started trial production. The field, under development by a unit of ARCO and its partners, holds reserves of 100 billion cu m. Construction is complete on a 91 km pipeline connecting field platforms with Hainan Island. The field will supply gas to Hong Kong on a trial basis starting Dec. 1 and on a regular basis Jan. 1.
Apache Corp.s 6H Stag horizontal well off Australias northwest coast produced at a rate of 5,820 b/d of 19 gravity oil and 308 Mcfd of gas through a 1 in. choke from a 3,355 ft section of M australis sandstone at 2,100 ft. The confirmation well is on the WA-209P block in the Carnarvon basin in 160 ft of water. Apache plans more work to determine the blocks commerciality. Apache is operator and holds 33.3% interest in the well with partners Santos Ltd. 54.17% and Globex Far East 12.5%.
BP Norge AS let a 5 year 700 million kroner ($110 million) contract to a group including Norways Norsk MVS, Brown & Root Energy Services AS, and Bjorge AS for maintenance and technical support in BPs Ula and Gyda fields off Norway.
TransTexas Gas Corp., Houston, in two financial arrangements, hedged 100,000 MMBTU of gas at $1.765/ MMBTU for November 1995-May 1996 and the same volume at $1.705/MMBTU for June 1996-May 1997. Under the terms of the latest agreements, the company has limited downside exposure, while preserving upside potential above $2.20/MMBTU.
Amoco Colombia Petroleum Co. 4 Opon on the Opon block about 125 miles north of Bogota flowed 58 MMcfd of gas and 1,900 b/d of condensate through a 4064 in. choke with 8,121 psi flowing tubing pressure from 1,022 ft of perforations in Eocene La Paz. The confirmation well is 1 mile south of 3 Opon, tested last year (OGJ, Sept. 19, 1994, p. 36).
Government
U.K. Industry & Energy Minister Tim Eggar announced proposed methods for companies to apply for licenses to supply the U.K. gas market after the British Gas plc monopoly ends next year. The proposals represent the main outstanding piece of the regulatory package for domestic gas competition, Eggar said. They will tell industry how to apply for a license and what we expect it to cost.
Pipelines
Oleoducto Central let contracts to Argentinas Techint Cotelcol and Saipem, a unit of Italys ENI, to lay two major stretches of an 800 km oil pipeline that will connect Colombias Cusiana and Cupiagua fields to the Caribbean coast. Saipem will lay the northern part of the line, a 486 km section between Puerto Boyaca and the port of Covenas on the coast. Techint Cotelcol will build the 218 km southern stretch. Oleoducto members are Colombias Ecopetrol, British Petroleum, Frances Total, Triton Energy, and Gruppo Canada.
TransCanada PipeLines Ltd., Calgary, shelved plans to buy a 51% interest in Alberta Natural Gas Co. Ltd., also of Calgary. TransCanada said it could not reach an agreement on a price for the interest.
Russia will begin gas deliveries to the former Yugoslav republic of Macedonia next month through a 100 km pipeline from the Bulgarian border to Skopje. Russian state firm Gazexport agreed to supply 800,000 cu m/year of gas. However, Macedonian industrial companies are slower in switching to natural gas than expected, so demand from this sector is expected to be about 130,000 cu m in 1996. Macedonia is expected to seek funding to build a gas pipeline network based around Skopje.
Total Petroleum purchased from AvData Systems Inc., Atlanta, 45 very small aperture terminals, backup equipment, and 3 years of satellite communications and network services to assist operations in its 1,300 miles of U.S. crude oil pipelines. Under the system, satellite dishes relay tank levels, pump and valve status, and flow rate information in less than 4 sec to a host DEC VAX in Denver, where it is displayed graphically in the pipeline control center. Totals controllers can then send commands back via satellite to control individual valves and pumps across the pipeline network.
Oilsands
Torch Energy Advisors Inc., Houston, agreed to buy the Alberta governments 11.74% interest in oilsands operator Syncrude Canada Ltd. for $352.2 million (Canadian). Torch owns a 25% interest in Gulf Canada Resources Ltd., Calgary, which holds a 9.03% interest in Syncrude. Gulf and Torch are creating an investment trust to offer $265 million in shares directly to investors.
Gas processing
Mobil Natural Gas Inc. agreed with Western Resources Inc. to develop and market a 200 MMcfd gas processing plant and gas gathering system in the Hugoton area of Southwest Kansas. The joint venture will provide services to third parties. The plant will be anchored by Mobil production and operated by Mobil. Western Resources Astra Resources unit will lay and operate about 47 miles of gathering lines, as well as compressor stations. The system will connect with Westerns Midcontinent market center, providing shippers with five interstate pipeline options.
National Iranian Gas Co. plans to start up next March a 16 million cu m/day gas processing plant in the southern port city of Bandar Abbas. The plant will receive gas from Sarkhoun gas field.
Companies
Norways Den norske stats oljeselskap AS bid IR0.78 ($1.22)/share, or IR198 million ($318 million), for Dublins Aran Energy plc, topping Atlantic Richfield Co.s bid of IR0.66 ($1.06)/share. Statoil and Aran recently agreed to study development of Connemara, Irelands only potentially commercial oil discovery (OGJ, Oct. 9, Newsletter). Despite the working relationship, Aran advised shareholders to reject Statoils bid. ARCO said it will not increase its offer for Aran.
Forest Oil Co., Denver, acquired a 56% interest in Saxon Petroleum Inc., Calgary, for about $40 million (Canadian). Anschutz Corp., also of Denver, recently acquired a 40% interest in Forest.
Kerr-McGee Corp., Oklahoma City, expects to book an after tax noncash charge totaling $145 million in third quarter this year. Noncash charges associated with oil and gas lease divestments and implementing Financial Accounting Standard 121 make up $130 million of the charges.
LPG
Shell Overseas Investments BV plans to buy a 51% interest in Sri Lankas state owned liquid petroleum gas company Colombo Gas Co. Ltd. for $37 million. Shell intends to invest $30-40 million in a new LPG terminal and pipeline and $10 million to upgrade existing facilities. Shells current business in Sri Lanka is limited to lubricants and chemicals marketing.
Refining
Petro-Canada, Calgary, licensed from UOP new software designed to optimize catalytic naphtha reforming units. The license for the platforming process operations simulator system (Plat-os) includes all of Petro-Canadas reforming units and is based on UOPs platforming process and catalyst technologies.
Japans Mitsui & Co. and German plant engineer Thyssen Rheinstahl Technik GmbH received an order to build Russias first refining units to produce unleaded gasoline, Tokyos Nikkei newspaper reported. A $280 million plant is to be delivered to refiner Yaroslavnefteorgsinpez by 1998 in a deal financed by Export-Import Bank of Japan. The Yaroslav refinerys new unit is expected to have 2 million metric tons/year throughput capacity.
Scotia Synfuels Ltd.s purchase of the mothballed 22,000 b/d Ultramar Canada Inc. refinery at Dartmouth, N.S., fell through. Scotia Synfuels said the asking price was much higher than comparable facilities. Ultramar said it cannot fulfill a 1990 contract to operate the refinery for 7 years because of high operating costs and falling profits. Ottawas Bureau of Competition Policy is to rule soon on whether Ultramar can shut down the refinery permanently despite the earlier contract.
Petroecuador opened a prequalification period for companies that want to bid to revamp, operate, and transfer back to Petroecuador its refinery at La Libertad on the Santa Elena Peninsula. The refinery includes two crude units with nominal capacity of 48,000 b/d. The selected company will upgrade and invest at its own risk and operate the plant for 25 years before turning it back to Petroecuador.
LNG
Korean Gas Corp. agreed to purchase from Ras Laffan Liquefied Natural Gas Co. 2.4 million tons/year of liquefied natural gas starting in 1999. Award of an engineering, procurement, and construction contract for the Ras Laffan LNG project is expected in March, with project completion scheduled for 1999.
Geothermal
DI/Perfensa Inc., a unit of DI Industries Inc., Houston, is apparent low bidder for the right to drill geothermal wells in El Salvador for El Salvador Electric Co. DI/Perfensas bid is $39 million. The drilling program is to last about 2 years. Award of the work is scheduled for Dec. 1.
Exploration
Hungarys MOL agreed to take a farmout on a 50% interest in the 924 sq km Block 442 in Algeria from Pluspetrol SA pending approval from Sonatrach and the Algerian government. The block, also known as El Guelta Nord, is in the Ghadames basin, 20 km north-northwest of giant El Borma field. The partnership planned to drill a 2,750 ft wildcat to test the basal Triassic sandstone, productive in El Borma field. The field has produced more than 600 million bbl of oil.
Vintage Petroleum Inc., Tulsa, took a farmout from Triton Energy on a 30% interest in Ecuadors Block 19 (see map, OGJ, July 10, p. 32). Ranger Oil Ltd., Calgary, took a 15% interest from Triton on the same block. Triton holds the remaining 55% interest and is operator of the 494,226 acre block. The agreements are subject to standard approvals. A 4 year exploration program includes 400 km of seismic surveys and drilling of two wildcats. Seismic work is to start in fourth quarter this year.
Alternate fuels
Amoco Corp. and Stone & Webster Engineering Corp. formed Swan Biomass Co. to commercialize Amocos biomass to ethanol conversion process. The process uses raw material from many sources, including wastes from agriculture and the forest products industry. Swan Biomass is conducting site specific studies for clients and expects to construct commercial plants based on its technology within the next 2 years. Copyright 1995 Oil & Gas Journal. All Rights Reserved.