INDUSTRY BRIEFS

Gas processing

Renaissance Energy Ltd., Calgary, signed an agreement with Carbon Resources Ltd. (CRL), a subsidiary of Colorado's Automated Transfer Systems Corp., to develop a system to convert stranded natural gas to clean liquid fuels. The companies will build a demonstration plant in Alberta to use CRL's cold-plasma gas-to-liquids system. If results are positive, Renaissance will consider licensing the technology for use at certain gas wells in Alberta. The plant is scheduled for completion in April 1999 and will be engineered by Bower Damberger Rolseth Engineering Ltd., Calgary.

Refining

Coastal Corp. let a lump-sum contract to ABB Lummus Global, Zurich, to provide process technology, engineering, design, procurement, and construction of a delayed coker, to be built at Coastal's San Nicolas, Aruba, refinery. The coker, similar to one built by Lummus at the refinery in 1995 (OGJ, June 6, 1994, p. 44), will increase Coastal's heavy crude refining and conversion capacity.

Gas distribution

Gas Natural De Noroeste (GNN), a joint venture of KN Energy International Inc., a unit of Lakewood, Colo.-based KN Energy Inc., and Grupo Marinhos, began providing industrial customers in Hermosillo, Mexico, with 2.5 MMcfd of natural gas. The joint venture was awarded a concession to build, own, and operate an 8-mile natural gas distribution system in Sonora state last year (OGJ, Sept. 28, 1998, p. 44).

Drilling-production

Phillips Norway Group's Ekofisk II project in the Norwegian North Sea produced at a lower than expected rate in the third quarter. Ekofisk produced an average 216,000 b/d of oil and 357 MMcfd of gas in the third quarter vs. an expected 306,000 b/d of oil and 789 MMcfd of gas (OGJ, Aug. 24, 1998, p. 34). A bad low-pressure separator may be the cause of the restricted flow.

Calgary firms
Gulf Indonesia Resources Ltd. and Talisman Ltd. and Indonesian state firm Pertamina began to deliver gas from their Corridor gas project to the Duri field steamflood project in central Sumatra. Corridor gas production, expected to reach 300 MMcfd, is shipped via a 544-km pipeline to Duri to displace 48,000 b/d of crude burned to generate steam for the world's largest steamflood (OGJ, Jan. 5, 1998, p. 34). It is expected to displace 250 million bbl crude over its lifetime.

South Africa's
state synthetic fuels producer Mossgas let a $300 million contract to Dresser-Kellogg Energy Services Ltd., Woking, U.K., to develop E-M offshore gas field and its satellites off South Africa. Mossgas currently uses gas from F-A field as feedstock for a synfuels plant at Mossel Bay (OGJ, Mar. 17, 1997, p. 23). Five production wells will be drilled in E-M and tied back as a subsea satellite of F-A platform, 49 km to the east. The first two wells are to be brought on stream in April 2000, the others a year later. E-M gas is intended to replace F-A gas, which is expected to be depleted in 2001. Estimated E-M field life is 6 years.

Pioneer Natural Resources Co.,
Dallas, drilled a third appraisal well in E-BD field in the Bredasdorp basin off South Africa (OGJ, July 6, 1998, p. 43). E-BD4, drilled updip of the E-BD1 discovery well, cut a 32-m oil-bearing interval at 2,600 m. On test, the well flowed 4,530 b/d of oil and 3.1 MMcfd of associated gas. Earlier this year, the first successful appraisal, E-BD3, flowed 5,980 b/d of oil and 3.6 MMcfd of associated gas. Pioneer operates the field under a production-sharing agreement with Soekor Exploration & Production Pty. Ltd., Cape Town.

Norway's Statoil AS
invited contractors to tender for modification of Gullfaks A and C platforms in the North Sea to handle oil from Gullfaks South, Rimfaks, and Gullveig fields. Development of these fields, known collectively as the Gullfaks Satellites project, was frozen earlier this year by the government in a bid to slow the pace of Norway's offshore work (OGJ, Aug. 17, 1998, p. 80). The fields are now slated to come on stream in October 2001.

Petrolex Energy Corp.,
a 64.73%-owned subsidiary of Colombia's Coplex Resources NL, successfully completed an open hole test of its Compae 2 appraisal well on the Maracas association contract in northern Colombia. On test, the well flowed 7.9 MMcfd of gas through a 43/64-in. choke with tubing pressure of 610 psi. Electric logs indicate 298 ft of gross gas pay in the Socuy and La Luna formations. Compae 1 discovery well flowed 10 MMcfd of gas and cut net pay of 225 ft in the same reservoirs in September 1997. The rig has been moved to the Compae 3 location, about 1 km northeast of Compae 1.

Croatian state firm INA
installed a platform jacket in Ivana gas field off Croatia. The platform, 40 km west of Pola, is Croatia's first offshore production facility. Ivana's reserves are estimated at 7.8 billion cu m. INA and Italian state firm ENI SpA co-own the platform through a production-sharing agreement signed in 1996. Production is slated to begin in first half 1999, and will be followed shortly by the laying of a Pavenna-to-Pola subsea pipeline.

Bouygues Offshore SA
(BOS), Montigny le Bretonneux, France, is reviewing bids with Saibos CML, its 50-50 joint venture with Italy's Saipem SpA, for a field development ship (FDS) that is expected to cost about $150 million. Elf will use the FDS for Phase 1 development of deepwater Girassol field off Angola (OGJ, July 20, 1998, p. 42). Completion of the FDS is slated for mid-2000.

XCL Ltd.,
Lafayette, La., won approval from China's Ministry of Foreign Trade and Economic Cooperation of a production-sharing contract its XCL-Cathay Ltd. unit signed with China National Oil & Gas Exploration & Development Corp. The contract is for appraisal and development of Zhang Dong block in China's Bohai Bay (OGJ, Aug. 31, 1998, p. 72).

Shell U.K. Exploration & Production
let a 5-year, £140 million ($235 million) contract to Subsea Offshore Ltd., Aberdeen, for underwater services. Beginning May 1, 1999, Subsea will provide diving support vessels, remotely operated vehicles, and other equipment for inspection, operations, and engineering in Shell's U.K. North Sea fields.

Companies

Gulf Canada Resources Ltd., Denver, plans to sell interests in western Canada gas processing plants and pipelines for more than $220 million (Canadian). Gulf said negotiations are under way, and sale to a single buyer is expected shortly. The company said in February it would sell a 49% interest in the assets as part of a debt reduction plan. Gulf Canada acquired about $2.79 billion in debt during an aggressive acquisition and expansion program and has retired about $780 million of it to date.

Imperial Oil Ltd.,
Toronto, received an additional $140 million (Canadian) from Revenue Canada as a result of a court challenge made to a tax ruling on its operations during 1974-90. The company has already received tax refunds of $847 million under the tax challenge, including about $500 million in taxable interest. The latest payments were made by Ottawa on behalf of seven provinces. Imperial is still negotiating for a settlement with three other provinces. The refunds stem from a 1992 court ruling favoring Gulf Canada Resources Ltd. on tax treatment of resource allowances (OGJ, Sept. 15, 1997, p. 35).

A unit of Equatorial Energy Inc.,
Vancouver, B.C., acquired Energy Process Services Ltd. (EPS) from First Dynasty Mines Ltd., Singapore, for $18.5 million. EPS's principal asset is an 80% interest in Sembakung oil field in Kalimantan, Indonesia. The field produces 3,200 b/d of light oil and has estimated remaining reserves of 39 million bbl. Remedial workover is to begin immediately and is expected to hike output by 20-25% by yearend (OGJ, July 27, 1998, p. 46). Development drilling of 12-18 wells is scheduled for second quarter 1999.

Elf Aquitaine SA
transferred its 30% interest in Russia's Severtek joint stock company to partner Neste Oy. Severtek, formed to develop South Shapkino field in the Nenets Autonomous Territory, is now owned equally by Russian producer Komitek and Neste. Elf said the disposal is in line with its recent portfolio pruning program. Neste and Komitek have begun the search for a new foreign partner for the project.

Exploration

Saudi Arabian Texaco Inc. and Kuwait Oil Co. found oil and gas in the Partitioned Neutral Zone (PNZ) between Kuwait and Saudi Arabia. The jointly operated Humma 4 discovery well flowed at a rate of 3,400 b/d of 32° gravity oil and sweet gas with 1,629 psi flowing pressure. The well cut 726 ft of gross pay and was drilled to 10,180 ft TD. The site is about 25 km southwest of the companies' Wafra field. More seismic and drilling are planned on the Humma prospect prior to a decision on development, expected in 1999. Typically, PNZ crude is 18-23° gravity.

ARCO British Ltd.
disclosed a gas discovery with a well drilled on Bombardier prospect on Block 205/23 off the U.K. The discovery lies in U.K.'s West of Shetland area, where there is no gas export infrastructure. Tom Phillips, ARCO's exploration director, said further study is required to determine whether appraisal is warranted. Block 205/23 partners are operator ARCO 40%, Fina Petroleum Development Ltd. 30%, and BHP Petroleum Great Britain plc 30%.

Petrochemicals

Al-Jubail Petrochemicals Co. (Kemya) signed a $720 million loan with a group of local, regional, and international banks to finance expansion projects. The projects, to be completed in 2000, will add 1.35 million metric tons/year of petrochemical products to the company's output. They would enable Kemya to produce 700,000 tons/year of ethylene, 200,000 tons/year of propylene, 218,000 tons/year of low-density polyethylene, and 235,000 tons/year of high-density polyethylene (OGJ, May 25, 1998, p. 29). Kemya is a 50-50 joint venture of Saudi Basic Industries Corp. and Exxon Corp.

Pipelines

CMS Energy Corp., Dearborn, Mich., and partners will purchase Western Mining Co. Ltd.'s 62% interest in Western Australia's Goldfields Gas Transmission Pipeline system for $200 million. The 1,380-km, 16-in. gas pipeline has capacity of 88 MMcfd and transports gas from the North West Shelf to large gold, nickel, cobalt, and iron ore mines in the state. Interests in the acquiring consortium are CMS 45%, Australia Gas Light Co. 45%, and Calgary's Transalta Corp. 10%.

Coastal Gas Pipelines Victoria,
a unit of Coastal Corp., Houston, completed a 113-mile pipeline that extends from an existing transmission network near Carisbrook, Australia, to Ararat, Stawell, and Horsham city gates. Coastal says the project is the first privately owned gas pipeline in the province of Victoria (OGJ, Nov. 17, 1997, p. 38).

Canada's National Energy Board
and several other federal agencies recommended environmental approval for the proposed Alliance Pipeline project to move natural gas from British Columbia to Chicago (OGJ, Aug. 25, 1997, p. 29). The board said the 1,864-mile line won't have a significant environmental impact if pipeline sponsors follow measures they have already committed to, plus 41 recommendations from regulators. The line is scheduled for service in second half 2000 with capacity of 1.325 bcfd. The federal cabinet will make a final decision on the line. U.S. regulators have approved the U.S. segment of Alliance.

Interprovincial Pipe Line Inc.,
Calgary, bought a 22.8% interest in the Chicap Pipe Line Co. from Clark Refining & Marketing Inc., St. Louis, for $34 million (Canadian). The Chicap system receives crude oil for the Chicago market from the 400,000 b/d Capline system, which extends from the Gulf of Mexico to Patoka, Ill. IPL said the purchase is part of its corporate strategy to expand investment in the North American energy delivery infrastructure.

Saudi Aramco Oil Co.
is laying a 750-km crude oil pipeline in Saudi Arabia to transport 285,000 b/d from Dhahran to the Al-Qassim region. The first 70 km of the pipeline is already completed. The pipeline replaces tanker trucks previously used to transport oil.

Power

El Paso Energy International Co., Houston, entered into a 50-50 partnership with Global Energy Inc., Cincinnati, to build and own a £71 million natural gas-fired power plant near Fife, Scotland. The plant, being built in two phases, will be capable of burning synthesis gas produced by gasification. Phase 1, which is being commissioned, involves a simple-cycle, 75-MW gas turbine. Eastern Natural Gas, U.K., will supply natural gas fuel for the plant. Phase 2 will involve the addition of a steam turbine with combined-cycle generating capacity of 120 MW. U.K. utility Powergen will buy the electricity under a 15-year contract.

American National Power Inc. (ANP),
Houston, will build a 1,100 MW gas-fired merchant power plant at Midlothian, Tex. The plant will be one of the first to interconnect to the transmission system of Texas Utilities Electric Co., which has a 2-year deal to buy power from the plant starting in 2000.

Alternate energy

ANP, in cooperation with National Wind Power, a subsidiary of National Power plc, plans to build a 250-MW wind farm in West Texas. The first phase of the multiphase project will involve a 30-MW plant, with completion expected in June 1999.

Tankers

ARCO Marine Inc., Long Beach, plans to build a third Millennium-class crude oil tanker featuring a double hull and advanced electronic navigation and control systems. It is designed to make the round trip from Valdez, Alas., to Long Beach. ARCO commissioned New Orleans-based Avondale Industries to construct the tanker. Avondale built two 125,000 dwt ships for ARCO in 1997. ARCO expects delivery by first quarter 2001.

Copyright 1998 Oil & Gas Journal. All Rights Reserved.