INDUSTRY BRIEFS
Coalbed methane
CMS Energy Corp. unit CMS Oil & Gas, Dearborn, Mich., will purchase 50% of Denver-based Pennaco Energy's working interest in its 492,000-acre coalbed methane property in the Powder River basin of northeastern Wyoming and southeastern Montana for $28 million. The companies will split operations evenly. Gathering, compression, and transportation will be provided by CMS Energy's gas pipeline unit CMS Gas Transmission & Storage.Drilling-production
Petroleos de Venezuela SA (Pdvsa) let contract to a private consortium for supply of high-pressure natural gas injection services in Venezuela. Pdvsa will use the gas for secondary recovery of crude from Santa Barbara and Pirital oil fields. Consortium partners are El Paso Energy Corp. 50%, GE Capital Structured Finance Group 25%, and Japanese firm Nissho Iwai Co. 25%. The group will build, own, and operate the $400 million, 308,000-hp Pigap II high-pressure natural gas injection facility, which will deliver as much as 1.5 bcfd to Pdvsa under a 20-year contract. Start-up is slated for fourth quarter 2000.Venoco Inc.,
Santa Barbara, Calif., agreed to buy all of Chevron Corp.'s California offshore assets and two onshore processing plants, reportedly valued at about $40 million. The purchase represents Chevron's exit from offshore California operations. The deal includes Chevron's 25% interest in Point Arguello field, its onshore Gaviota processing plant, Carpinteria gas plant, Gail and Grace platforms in Sockeye and Santa Clara fields, and interests in three other platforms in Dos Cuadras field. Total production from the assets is 11,100 b/d of oil and 10.1 MMcfd of gas.
Malaysian state firm Petronas
began initial production of about 8,000 b/d of oil from two slimhole wells in Ruby field off Viet Nam. Production is expected to reach 20,000 b/d in 1999. Petronas operates the field under a production-sharing agreement. Interests in the two blocks containing Ruby field are Petronas 85% and Petrovietnam Exploration & Production Co. 15%.
Refining
Phillips Petroleum Co. and Pdvsa finalized plans to begin construction of a 58,000 b/d coker at Phillips' Sweeny, Tex., complex by yearend (OGJ, Sept. 1, 1997, p. 40). Phillips and Pdvsa will each hold 50% interest in the $450 million project. Pdvsa will supply the refinery with as much as 165,000 b/d of Venezuelan heavy crude. The coker will become part of Diamond 66, the recently announced joint venture of Phillips and Ultramar Diamond Shamrock Corp. (OGJ, Oct. 19, 1998, p. 39). The coker is slated for completion in fourth quarter 2000.India
granted Hindustan Petroleum Corp. Ltd. (HPCL) final approval for its 180,000 b/d refinery, to be built at Bhatinda, Punjab state. Partners in the project, estimated to cost 130 billion rupees, include HPCL 26% and Punjab State Industrial Development Corp. 25%. Other potential stakeholders are Exxon Corp. and Saudi Aramco (OGJ, Aug. 17, 1998, p. 42).
Environment
The U.S. Justice Department said that Allied Environmental Services Inc., Overland Park, Kan., and two of its officials were indicted for allegedly injecting 310,000 gal of petroleum-contaminated wastewater into wells in Oklahoma's Cushing, Beggs, and Lincoln counties without Oklahoma Corporation Commission permits. Allied faces a possible $1.1 million fine, and Allied officials Koteswara Attaluri and Gary Bicknell, plus Mac Overholt of Overholt Trucking Co., face fines and up to 5 years in prison.Exploration
Unocal Corp. discovered a gas field on Block 12 in the Gulf of Thailand. The block lies southeast of its Erawan field and south of its Funan field (see related story, p. 34). The South Gomin-1 discovery well was drilled to 13,966 ft and cut at least 269 ft of gas-bearing sand in 16 zones. Three drill stem tests yielded a combined flow rate of 41 MMcfd. South Gomin is expected to contain an unconfirmed 150-280 bcf of gas, Unocal said.Emerald Energy plc,
Epsom, U.K., tested three intervals with its Gigante 1A exploratory well on the Matambo contract area in Colombia's Upper Magdalena Valley. Partner Monument Oil & Gas plc, London, said the two deepest intervals flowed formation water and small amounts of heavy oil. The shallowest interval, at 15,372-15,430 ft, flowed 2,250 b/d of 33.1° gravity oil and 950 Mcfd of gas through an 80/64-in. choke. Monument said Emerald is reviewing inconsistencies between test results and log and core data. License interests are operator Emerald 86% and Monument 14%, but Monument can increase its share to 40%.
Gas distribution
Mexico's Energy Regulatory Commission awarded Belgium's Tractebel SA a 30-year natural gas distribution contract to supply the Queretaro zone, which includes the Queretaro metropolitan area and San Juan del Rio, Mexico. Tractebel will acquire a 257-km pipeline network from both Distribuidora de Gas de Quer?taro (Digaqro) and Pemex Gas y Petroqu!mica B sica for $47.2 million and build a 613-km gas pipeline. Distribution volumes are expected to reach 64 MMcfd within 5 years.Gas marketing
Shell Canada Ltd., Calgary, and Nova Scotia Power have signed a natural gas supply contract covering volumes from the Sable Offshore Energy Project (OGJ, Nov. 2, 1998, p. 44). Shell will supply the power company with 60 MMcfd of gas for 10 years. SOEP is expected to begin production by yearend 1999. Sante Fe Drilling Co. (Canada) Ltd. is preparing to drill SOEP's first producing well 6 miles southwest of Sable Island off Nova Scotia.Public Energy Authority of Kentucky
signed a $52.8 million contract to purchase 31 bcf of natural gas over the next 10 years from Marathon Oil Co. The gas will flow through the Texas Gas Transmission system from Marathon's fields in the Gulf of Mexico.
Gas storage
Gaz de France expressed interest in establishing underground gas storage sites in Indian states such as Tamil Nadu, Gujarat, and Kerala for public-sector petroleum companies including Gas Authority of India Ltd., Oil & Natural Gas Corp., and Indian Oil Corp. Each site is expected to have a capacity of 1 billion cu m and cost $300 million.LNG
Tokyo Gas is working with Nichias Corp., Tokyo, to develop a new type of insulating material for LNG storage tanks. The technology is aimed at eliminating emissions of hydrochlorofluorocarbons, considered harmful to the ozone layer. Starting in 2004, HCFC-141b, a substance commonly used as a foaming agent for polyurethane foam insulation, will no longer be manufactured. Tokyo Gas plans to use the new material at new LNG storage facilities in Kanagawa Prefecture. The company estimates that a 200,000-kl tank would require 4,500 cu m of insulating material. Nichias will manufacture the material.Hyundai Engineering & Construction Co. Ltd.,
Seoul, on behalf of Korea Gas Corp., let a ?4 billion subcontract to Japan's Tonen Corp. and Mitsubishi Heavy Industries Ltd. for design and construction supervision of two 140,000-kl LNG storage tanks and other equipment. The tanks will be used at an LNG regasification terminal at Inchon.
LPG
Thai-Malay joint venture Keloil-PTT Sdn. Bhd. will not proceed with the final two phases of its three-phase plan to expand its LPG terminal and bottling complex in northern Malaysia's Kelatan state (OGJ, Jan. 27, 1997, p. 30). The venture cited regional economic problems as the cause for the delay of the $18.8 million expansion plan. A new start-up date has not been determined.Hungary's MOL Rt.
plans to take as much as 20% of Hungary's LPG market by yearend 1999. MOL intends to sell as much as 100,000 metric tons/year of LPG in 1999 for about $60 million. This volume is equivalent to about a 2-3% increase from MOL's 1997 LPG sales. Hungary's LPG market is currently 350,000 tons/year and is expected to grow to 450,000 tons/year by yearend 2003. Starting in December, MOL will outsource gas cylinder filling to its main LPG competitors Primagaz, Royal Dutch/ Shell, and Totalgaz.
Gas processing
Agip SpA, BG plc,Texaco Inc., and Lukoil plan to invest $300 million to construct a gas/condensate processing plant in Russia's Karachaganak gas field in 1999. The consortium expected the field to produce 70,000 b/d of condensate this year, but it yielded only 22,000 b/d in the first half. Other projects planned for 1999 are: a new gas turbine, a liquids pipeline between Karachaganak and Bolshoy Chagan, and a gas pipeline to western Russia.Oilsands
A shutdown at Syncrude Canada Ltd.'s Northern Alberta oilsands plant reduced synthetic crude production by almost 50%-to 130,000 b/d from 230,000 b/d. The shutdown was fthe result of a fire in one of the plant's two cokers. Syncrude also reported a leak in a diluent recovery unit. The diluent unit recovers naphtha from bitumen and preheats the bitumen feed to the fluid cokers. Normal production at the unit was restored within 24 hr. The consortium cut production to 140,000 b/d last summer, when a different coker was shut down for 25 days (OGJ, Aug. 31, 1998, p. 30).Petrochemicals
Optimal Group, a joint venture of Petronas 70% and Union Carbide Corp., Danbury, Conn., 30%, let a $300 million contract to Germany's Linde AG and Samsung Engineering Co., Seoul, to build an ethane/propane cracker at Kerteh, Malaysia. The 600,000 metric ton/year ethylene plant will be part of a $1.6 billion petrochemical complex. The olefins unit will be operated by Optimal Olefins (Malaysia) Sdn. Bhd., an ethylene oxide/ethylene glycol plant by Optimal Glycols (Malaysia) Sdn. Bhd., and a derivatives plant by Optimal Chemicals (Malaysia) Sdn. Bhd. Two units of Kvaerner AS will provide overall project management for the complex, slated for completion late 2001.The Borouge joint venture
of Abu Dhabi National Oil Co. (Adnoc) and Borealis AS, Copenhagen, let contract to Alliance Bechtel Linde-a joint venture of Linde and Eastern Bechtel Co. Ltd., Houston-to build an ethylene unit at Borouge's Ruwais petrochemicals complex in Abu Dhabi. The unit is slated for completion in 2001 and will produce up to 600,000 metric tons/year of ethylene from Adnoc-supplied ethane. The ethylene will feed two 225,000-ton/year polyethylene units, to be built at the site, and a planned ethylene dichloride plant.
Pipelines
Libyan and Pakistani financial institute Pak Libya Holding Co. (PLHC) plans to finance the construction of a $6 million pipeline from the Karachi refinery operated by National Refinery Ltd. (NRL) to Karachi International Airport, to carry 10,000 b/d of JP-1 jet fuel. The pipeline is said to be the first jet fuel line in Pakistan. NRL will earn a projected $72 million/year from the sale of the fuel.The U.S. Transportation Department's
Research and Special Programs Administration issued a rule allowing operators of older hazardous liquids and carbon dioxide pipelines to choose a risk-based alternative instead of the hydrostatic pressure testing method that current regulations require.
Companies
Poco Petroleums Ltd., Calgary, launched a $163 million (Canadian) takeover of Calgary's PanEast Petroleum Corp. PanEast produces 28 MMcfd of natural gas and 300 b/d of oil. It has proven and probable reserves of 202.5 bcf of gas and 2.2 million bbl of oil and 130,000 net undeveloped acres. Poco said the planned acquisition is consistent with its focus on developing gas in deeper, more prolific formations in Western Canada. Chesapeake Energy Corp., Oklahoma City, acquired 20% of PanEast stock last year and will trade the shares for certain assets in northeast British Columbia and $8 million cash.Royal Dutch/Shell
unit Thai Shell Exploration & Production Co. will not sell its Thai petroleum exploration and production interests, which have been valued at $300 million (OGJ, Oct. 12, 1998, p. 41). Nine international oil firms submitted bids for the assets, which include a 75% interest in the onshore SI concession in the northern provinces of Kamphaeng Phet and Sukho- thai and 100% ownership in the 1,300 sq km Block B6/27. Onshore field Sirikit, located in the SI concession, has produced 100 million bbl of oil.
Vintage Petroleum Inc.,
Tulsa, agreed to purchase Elf Aquitaine's Ecuadorian oil and gas subsidiary, Elf Hydrocarbures Equateur, for $39.7 million in cash and Vintage common stock. Elf holds interests in and is operator on three E&P licenses: Block 14, Block 17, and the Shiri-puno license area, which together produce 3,000 b/d of oil.
Sun Co. Inc.,
Philadelphia, changed its name to Sunoco Inc. and will update its logo and retail outlets.
YPF Indonesia Ltd.
and Amerada Hess (Indonesia-Jambi Me- rang) entered into an $17.7 million agreement with Saga Petroleum AS for the sale of its interest in the Jambi Merang block off Indonesia. The purchase will end Saga's activities in Indonesia. The license was first bought by Cue Energy Resources NL, New Zealand for an agreed $27 million, but the offer was later withdrawn (OGJ, Apr. 20, 1998, p.45).
Power
Electricit? de France (EdF) won a tender for financing, construction, and operation of the $220 million, 495-MW combined-cycle Rio Bravo natural gas-fired power plant in northern Mexico, Tamaulipas state. The contract is EdF's first in Mexico. EdF will fund 25% of the investment and borrow the balance. Work is slated to begin in second half 1999.Copyright 1998 Oil & Gas Journal. All Rights Reserved.