INDUSTRY BRIEFS

Power

Tennessee Valley Authority (TVA) will use natural gas to fuel 48 of its combustion turbines by mid-1999, compared with 28 currently. TVA will partner with local power distributors to reduce natural gas costs. TVA also will offer a range of services to distributors, including fuel purchase and management. TVA has partnered with the utilities department of New Albany, Miss., to manage gas purchasing, storage, and transportation for the public utility.

Lubes

Sun Co. Inc., Philadelphia, began a $15 million, 30-day turnaround of its base oils and lubricants refinery in Yabucoa, P.R. The refinery was reconfigured in 1997 to reduce fuels production and increase lubricants output, which boosted lubricants yields to more than 9,000 b/d and cut feedstock use to 30,000 b/d of conventional crude from 85,000 b/d.

Petrochemicals

Shell Nederland Chemie BV let contract to Kinetics Technology International BV for the engineering, design, supply, and construction of two new cracking furnaces for its ethylene complex at Moerdijk, the Netherlands. The furnaces are part of a capacity expansion project to be completed in 2000.

Gulf Petrochemical Industries Corp.
started production of a $180 million urea plant at its ammonia/methanol complex at Manama, Bahrain. A joint venture between Bahrain, Kuwait's Petrochemicals Industries Co., and Saudi Basic Industries Co. (OGJ, Sept. 22, 1997, p. 38), the urea plant's export production is destined for Canada, Australia, China, and Southeast Asia. An agreement was signed to export 100,000 metric tons/year for the next 5 years to the U.S.

Sidi Kerir Petrochemical Co.,
Egypt, let a $200 million contract to South Korea's Samsung Engineering Co. Ltd. to build a polyethylene plant in Egypt. Construction will be completed in July 2000. The plant's capacity and location were not disclosed.

Terminals

Williams Cos., Tulsa, agreed to purchase interests in 15 terminals with a combined storage capacity of 2.9 million bbl from TOC Terminals Inc., a unit of Stratus Petroleum Corp. Williams, which already has a stake in and operates eight of the terminals, will have 79.5% interest in those eight and interests of 34-38% in the other seven. The terminals are in Alabama, Georgia, North Carolina, South Carolina, Tennessee, and Virginia. Murphy Oil USA Inc. has a 20.5% stake in all 15 terminals, and Conoco Inc. has the remaining interests in seven of the terminals.

Drilling-production

A 1,000-gal crude oil storage tank at Sonat Exploration Co.'s yard in Pitkin, La., exploded and caught fire, killing four contract workers and damaging equipment. The cause of the explosion is under investigation. The contract workers were employed by Quantum Production Well Services Inc., Hessmer, La.

Chevron Niugini Pty. Ltd.
produced first oil from the Gobe onshore project in Papua New Guinea. Production is 10,000 b/d and could reach 50,000 b/d by midyear. The Gobe development consists of South East Gobe and Gobe Main fields (OGJ, Feb. 13, 1995, p. 25). Participants in the Gobe Main joint venture are: operator Chevron 19.4%, Oil Search Pty. Ltd. 27.1%, Orogen Minerals Pty. Ltd. 20.5%, Ampolex Pty. Ltd. 16.5%, BHP Petroleum Inc. 9.7%, Merlin Petroleum Co. 4.8%, and Petroleum Resources Gobe Pty. Ltd. 2%. Partners in South East Gobe are: operator Chevron 10.7%, Oil Search 21.9%, Orogen Minerals 20.5%, Southern Highlands Petroleum Co. Ltd. 17.6%, Ampolex 9.1%, BHP 5.3%, Barracuda Pty. Ltd. 7%, Cue PNG Oil Co. Pty. Ltd. 2.4% and Petroleum Resources 2%.

CMS Energy Corp.
unit CMS Nomeco Oil & Gas Co. said the Campo Rosario 15 development well on Venezuela's Colon block flowed 2,550 b/d on test from the Mirador formation. Operator CMS, which has a 43.75% interest in Colon, said production from the block has increased to 12,000 b/d with completion of Campo Rosario 15.

Esso Production Malaysia Inc.
began producing oil from Seligi F platform, 165 miles off Terengganu, peninsular Malaysia. Production from the platform will be 21,000 b/d later this year, says Esso. Interests in the development are operator Esso 78% and Petronas Carigali Sdn. Bhd. 22%. Seligi F is the seventh platform installed in Seligi field. Esso said field development costs will reach $155 million.

Centurion Energy International Inc.,
Calgary, said oil began flowing from El Biban field in Tunisia, following completion of an 18-km offshore pipeline and onshore processing facilities at Zarzis. On test, El Biban 3 well flowed 4,500 b/d, which demonstrated that mechanical problems with the tubing string in the well re-entry were corrected by recent remedial work. Present production from the well is 1,500 b/d. A planned program of staged production increases is under way. Operator Centurion has a 73.7% interest in El Biban.

Global Marine Inc.,
Houston, agreed to acquire a third-generation semisubmersible drilling rig, the Stena Forth, from a unit of Coflexip Stena Offshore for $150 million. Global will assume operation of the rig at closing this month. Stena Forth is operating in the U.K. North Sea under a contract with British Petroleum Co. plc that extends through November 1999. The rig is capable of working in water depths of 1,800 ft and can be modified for work in as much as 3,000 ft of water. In a separate deal, Global said that a contract for its Vinlander rig was extended for 1 year to drill off Newfoundland. The firm will receive revenues of $68 million for the extension.

Product marketing

Environmental Remediation Holding Corp. (ERHC), Lafayette, La., formed a joint venture with Centram SA, a Panamanian firm, to supply fuel and other supplies to vessels using the Panama Canal from the Caribbean Sea. Centram was granted a 10-year concession from the Panama Canal Commission to supply the fuel and will receive one-third ownership in the JV. ERHC, in exchange for two thirds of the net profits, will supply a tug boat and a 30,000-bbl fuel barge.

Companies

Petroleum Geo-Services ASA (PGS), of Houston and Oslo, will acquire the floating production, storage, and offloading operations of Awilco ASA. Shareholders in Awilco will receive 0.155 PGS share for each share of Awilco. PGS will also assume net liabilities not to exceed $440 million. The acquisition is expected to close in May.

Russia's parliament
approved the privatization of Moldova Gas Co. A 50% stake in Moldova went to Gazprom to partially offset a $650 million debt the gas company owes Gazprom. The Moldovan government retains 35% ownership, separatist authorities in Tiraspol a 14% stake, and private investors 1%. Moldova Gas has assets of $285 million.

El Paso Energy Corp.
purchased Leviathan Gas Pipeline Partners LP from DeepTech International Inc. for $450 million. El Paso will own 100% of the general partner in Leviathan and a 27.3% interest in the partnership, but no publicly held outstanding units. As part of the transaction, DeepTech will merge with an El Paso unit. Some assets of DeepTech and its subsidiary Tatham Offshore Inc. will be restructured so that Rigco North America LLC will become a wholly owned subsidiary of Tatham. Tatham will operate Rigco's two semisubmersible drilling rigs, FPS Bill Shoemaker and FPS Laffit Pincay.

Chesapeake Energy Corp.,
Oklahoma City, agreed to pay $105 million in cash for Occidental Petroleum Corp.'s natural gas interests in West Panhandle field in Carson, Gray, Hutchinson, and Moore counties, Okla. The assets consist of 100 bcf of reserves, with an estimated reserve-to-production index of 8 years; they are 85% proved developed and producing. The wells produce 36 MMcfd net to Oxy's interest from 256 wells, of which all but two were Oxy-operated. Chesapeake will operate and own average working interest and net revenue interest of 99.5% and 85.2%, respectively. The transaction will close May 29.

Western Atlas Inc.
will acquire two companies in transactions worth $332 million. Western Atlas agreed to purchase Wedge Dia-Log Inc., a wire line company owned by Houston investment firm Wedge Group Inc., for $218 million. Western Atlas also said it is acquiring 3-D Geophysical Inc., Littleton, Colo., for $114 million. Western Atlas made an all-cash offer to 3-D Geophysical shareholders of $9.65/share of common stock.

Refining

Energy BioSystems Corp., The Woodlands, Tex., issued the first commercial license of its biocatalytic desulfurization (BDS) process to Anchorage-based Petro Star Inc., a unit of Arctic Slope Regional Corp. Petro Star will use the proprietary biorefining technology for the removal of sulfur from diesel in a 5,000 b/d BDS unit to be installed at Petro Star's Valdez, Alas., refinery.

Manas Refinery Partners Inc.,
San Antonio, and Kyrgyzstan's national airline, Kyrgyzstan Aba Joldoru, formed a venture to construct and operate a 400,000 metric ton/year refinery near Bishkek, Kyrgyzstan. The $35 million refinery will be the first in the country to have a catalytic reformer, an important gasoline-producing unit. The refinery will produce jet fuel, high-octane unleaded gasoline, and diesel for domestic consumption. Start-up is expected in May 1999.

Nigerian National Petroleum Corp.
and Total signed a 2-year agreement under which Total will perform a $200 million turnaround maintenance project of the 110,000 b/d Kaduna refinery in Nigeria. A similar agreement reported previously never came to fruition (OGJ, Jan. 12, 1998, p. 30). Total will supervise the work, which will be subcontracted to firms selected by both partners. Some of the refinery's idled units could start up in 6 months, says Total.

Exploration

An Air Bell 412 helicopter that crashed in transit to a Chinese Petroleum Corp. offshore drilling rig near Taiwan's Pescadores Islands on Mar. 2 claimed the life of the pilot and two crew members. The Taipei-based Daily Air helicopter's tail hit the deck of the rig, sending the aircraft plunging into the sea, according to an official of Taiwan's Civil Aeronautics Administration. The pilot's body was recovered, but rescue workers were still searching for the bodies of the copilot and flight engineer.

Petro-Canada Inc.,
Calgary, said Petro-Canada Shell Wildcat 16-12-28-7 W5, drilled to 4,075 m TD, cut 140 m of gas pay in multiple zones in the Turner Valley formation in the Wildcat Hills area of the Alberta Foothills, 50 km west of Calgary. Production testing is scheduled for later this month. Operator Petro-Canada said a prior discovery well, Petro-Canada Shell Wildcat 8-8-28-6 W5, was drilled to 3,620 m TD and cut 113 m of net gas pay, also in multiple zones in the Turner Valley. This well flowed at a combined rate of 25 MMcfd. Interests in the two wells are Petro-Canada 56% and Shell Canada Ltd. 44%.

Pipelines

Six energy companies formed Tri-States NGL Pipeline LLC to build a natural gas liquids pipeline from Alabama and Mississippi to plants in Louisiana. The line will have an initial capacity of 80,000 b/d and final capacity of 150,000 b/d. The participating companies are Amoco Pipeline Co., Enterprise Products Co., Koch Pipeline Southeast Inc., a group led by Duke Energy Field Services Inc., Shell Oil Co.'s Tejas Natural Gas Liquids LLC unit, and a unit of Williams Cos. The pipeline will link three gas processing plants under construction to new and expanded fractionating plants on the Mississippi River.

Coflexip Stena Offshore Group
says its pipelay and subsea construction vessel, CSO Apache, established a rigid-reeled world depth record for deepwater oil and gas flowlines in Brazil at a water depth of 1,373 m. The vessel installed a 10-in. gas export pipeline across the Itapemerim Canyon in Roncador field off Brazil. The contract, let by state firm Petroleo Brasileiro SA, was for procurement and installation in several Brazilian fields of 11 rigid-reeled pipelines, totaling 105 km in length, and vertical connectors and pipeline end manifolds.

Colonial Pipeline Co.,
Atlanta, said repair crews completed a nitrogen purge of its No. 2 main line at a site under Interstate 10 in Houston. The 36-in. main line had a leak that forced the company to shut down service. Colonial has since originated gasoline and distillates at Houston through its 40-in. No. 1 main line to its Hebert station in Beaumont, Tex. The distillates streams are then separated back into No. 1 gasoline and No. 2 distillate for transport to the east. The No. 2 main line should be on stream by Mar. 31.

Amoco Canada Petroleum Co Ltd.
applied to Alberta regulators to expand an ethane pipeline in the province. Amoco, operator of the Alberta Ethane Gathering System (AEGS), said the expansion would add 23,000 b/d of capacity to the western leg of the system by looping two sections of the line. A total of 105 km of pipe would be added. Total capacity on the western leg of AEGS will be 80,000 b/d after completion. One section extends to Joffre, Alta., from Cochrane, west of Calgary. The other looped section extends north from Didsbury, Alta. If approved, construction will begin early this summer. Amoco's partners in AEGS are Alberta Energy Co. Ltd. and Nova Chemicals Ltd.

Gas processing

BOC Process Plants, Guildfor, U.K., let a 100 million deutsche- mark contract to GHH Borsig Turbomaschinen GmbH for turbomachinery to be used in an air separation plant 40 km west of Cuidad del Carmen, Mexico. The nitrogen will be transported 80 km offshore through two 36-in. pipelines for injection into Pemex wells in the Cantarell oil fields complex (OGJ, Aug. 25, 1997, Newsletter). GHH Borsig will provide four motor driven axial-radial air compressors and four steam-turbine driven two-casing centrifugal-flow nitrogen compressors, each with 50 MW of power. The proposed nitrogen plant will be operational in 2000.

Copyright 1998 Oil & Gas Journal. All Rights Reserved.