INDUSTRY BRIEFS

Correction

The source of the data shown in maps and tables featured in the third part of the series on Northeast Asian Gas was listed incompletely as: Royal Institute of International Affairs (OGJ, July 20, 1998, pp. 27-30). The complete source listing should have read: China Natural Gas Report, jointly published by China OGP Newsletter, Xinhua News Agency, and the Royal Institute of International Affairs.

Petrochemicals

Cancarb Ltd., a unit of Calgary-based TransCanada PipeLines Ltd., will increase thermal carbon black capacity at its Medicine Hat, Alta., plant by 25%. The plant's waste heat will be used to fuel an adjacent 38-MW power plant, to be built by TransCanada Power. Electricity will be sold to the city of Medicine Hat under a 20-year agreement. The city will sell to TransCanada the natural gas that it otherwise would have used to generate electricity at city power plants. Capital costs will be $57 million for the power plant and $28 million for the carbon black expansion. Start-up is slated for mid-2000.

BASF Corp.
let contract to Halliburton Co. unit Brown & Root Engineering & Construction to build a 50,000 metric ton/year acetylene plant at its Geismar, La., complex. The project will include a cracked-gas generation unit, a gas separation unit, control and switchgear buildings, and a cooling tower. Mechanical completion is slated for second quarter 1999.

Pipelines

Maritimes & Northeast Pipeline received U.S. regulatory approval for the U.S. portion of its natural gas pipeline project. The line will move gas from the Sable Island area off Nova Scotia to markets in Atlantic Canada and New England. M&NE said the approval means the project will meet its November 1999 in-service date. State permits ensuring water quality where the line crosses rivers and other bodies of water are expected this fall.

Construction began
on a 270-km natural gas pipeline in Ukraine's Crimea region, from Dzankoy to Kerch via Feodsiya. It will serve 30% of the population of Crimea. Cost of the project is about $100 million.

Malaysia's Petronas
signed an agreement with Australian Gas Light Co. (AGL) to jointly develop the Australia portion of the 2,400-km Papua New Guinea-to-Queensland gas pipeline (OGJ, July 13, 1998, Newsletter). The 50-50 combine will build, own, and operate the 2,000-km Australian section of the line, which will cost about $911 million (Australian). Construction will start in April 1999, with start-up planned for October 2001.

Nicor Inc.,
Naperville, Ill., and TransCanada PipeLines Ltd., Calgary, announced an open season on the Voyageur Gas Transmission Project, which is part of the Viking Voyageur pipeline (OGJ, Aug. 25, 1997, p. 29). The 36-in. pipeline will connect the Chicago hub with Wisconsin. It will have a capacity of 1.05 bcfd and is expected to be in service by December 2000.

Gas processing

Alberta Energy Co. (AEC), Calgary, signed a memorandum of understanding with the field services division of Westcoast Energy, Vancouver, B.C., for 4 years of firm-service gas processing at Westcoast's 700 MMcfd Fort Nelson, B.C., plant. AEC will deliver natural gas from its Maxhamish field in northeastern British Columbia. Westcoast will begin processing and transportation services in April 1999. AEC will supply as much as 300 bcf of gas over 15 years. AEC's Maxhamish facilities have a design capacity of 70 MMcfd.

BOC Gases,
Murray Hill, N.J., signed a 10-year helium supply agreement with Union Pacific Fuels Inc. (UPFI), a unit of Union Pacific Resources Group Inc., Fort Worth. BOC will purchase as much as 150 MMcf/year of liquefied helium from UPFI for about $6 million/year. Deliveries are scheduled to start in April 1999. UPFI will produce the helium at its Cheyenne Wells, Colo., gas processing plant, slated to start up next month. The plant will also produce pipeline-quality natural gas and NGL. The agreement also gives BOC access to helium supplies from six other UPFI plants.

Companies

Texaco Exploration Sakhalin Inc. and Mobil Sakhalin Neftegaz Inc. signed several agreements with affiliates of Rosneft and Rosneft-Sakhalinmorneftegaz to jointly develop the Sakhalin III Kirinskiy block. Texaco and Mobil will each hold a one-third share; the two Russian firms will equally split the remaining third. The firms have formed an operating company, PegaStar Neftegaz Ltd. LC, for exploration, development, and production on the block. The partners also will jointly appraise and possibly bid on Sakhalin VI (Pogranichny block). Texaco says the firms hope to begin exploratory drilling as early as next year.

Key Energy Group Inc.,
East Brunswick, N.J., signed a definitive merger agreement with Dawson Production Services Inc., San Antonio. Key will acquire Dawson for $17.50/share. The move follows Key's recent unsolicited takeover bid for Dawson, which Key has withdrawn (OGJ, Aug. 10, 1998, Newsletter). Dawson's board approved the merger and agreed to recommend that stockholders tender their shares. The deal is valued at about $352 million, including $150 million in Dawson debt. Key unit Midland Acquisition Corp. was to commence the tender offer by Aug. 17. Cost savings of $10 million/year are expected.

Hercules Inc.,
Wilmington, Del., will acquire all shares of BetzDearborn, Trevose, Pa., for $72/share in cash. The deal is valued at $2.4 billion, including assumption of $700 million in Betz- Dearborn debt. The merged firm will be headquartered in Wilmington. Its water and industrial process treatment businesses, excluding paper process, will operate under the BetzDearborn name. BetzDearborn said "the vast majority" of its employees would be retained.

Marathon Oil Co.,
Houston, received all necessary approvals for its acquisition of Tarragon Oil & Gas Ltd., Calgary (OGJ, June 8, 1998, p. 31). Marathon's worldwide reserves increased about 20% as a result of the transaction, valued at $1.1 billion.

Baker Hughes Inc.,
Houston, completed the acquisition of Western Atlas Inc., also of Houston (OGJ, May 18, 1998, p. 31). The transaction is valued at $4.8 billion.

Exploration

British-Borneo Petroleum Syndicate plc, London, and Australia's Woodside Petroleum Ltd. acquired farmouts in three production-sharing contracts off Mauritania from Australia's Hardman Resources NL. British-Borneo has taken a 35% interest in Blocks 3, 4, and 5, while Woodside has taken 35% and operatorship. The firms have committed to acquiring seismic data over the blocks, which cover almost 10,000 sq miles, and have an option to drill up to two wells to complete their farmout obligation. Water depths are as much as 6,000 ft.

Total Indonesia
let contract to Cie. Generale de Geophysique (CGG), Massy, France, for acquisition of 3D and 2D seismic in the transition zone and onshore areas of the Mahakam River delta near Samarinda, East Kalimantan. The contract-one of the largest ever awarded in Indonesia for geophysical services, according to CGG-will use new technology developed by CGG and Sercel SA, Carquefou, France, for gathering high-quality seismic data in hazardous coastal zones. Work will start immediately; the survey is slated for completion by late 1999.

Marketing

Shell International Petroleum Co. Ltd., London, signed a contract with Vietnamese state firm Air Services Co. (Airserco) to form a joint venture to build a $14.5 million aviation refueling facility at an undisclosed site in Viet Nam. The new firm, called Shell Vietnam Aviation Ltd., will be owned 70% by Shell and 30% by Airserco. It expects to receive a 30-year operating license by yearend.

Refining

Hungarian state firm MOL Rt. let two contracts for residue upgrading at its 161,000 b/d Duna refinery. The project involves converting a desulfurization unit to a hydrocracker to enable production of lower-sulfur diesel fuel. This contract was let to Chevron Corp., whose mild Isocracking process will be used. The second contract is for construction of a hydrogen plant. This was let to Linde AG, Hoellriegelkskreuth, Germany. Total capacity of the residue upgrading plant will be 1 million metric tons/year.

Mobil Oil Australia Ltd.'s
70,000 b/d Port Stanvac refinery near Adelaide is expected to be off line for nearly a month after an explosion and subsequent fire in the crude oil distillation unit last week. Eighteen fire units worked for a number of hours before getting the fire under control. No one was hurt in the incident, and the refinery's 300 workers will continue to work on site during the shutdown. Damage is estimated at $1 million (Australian). Investigations are under way as to the cause of the accident. This is the fourth serious fire at Port Stanvac in 8 years, the last of which occurred in 1994.

Associated Octel Co. Ltd.,
Ellesmere Port, U.K., agreed to market Richmond, Va.-based Ethyl Corp.'s tetraethyl lead (TEL) anti-knock fuel additives in markets outside the U.S. and Europe. Octel says that, as leaded fuels are phased out around the world, it has become increasingly expensive to make, sell, and distribute TEL. The move is intended to result in significant costs savings for Octel.

U.S. Environmental Protection Agency
intends to exclude gasification of oil-bearing residues at refineries from its definition of solid waste under the Resource Conservation and Recovery Act (RCRA). The exclusion would be similar to one granted to refineries that perform coking. The move will mean that residue gasification will be considered a refining process, rather than a waste disposal method. As a result, refineries will not be required to undertake the arduous process of obtaining a RCRA Part B permit.

LPG

Repsol SA purchased a 75% stake in Duragas, an Ecuadorian LPG marketer valued at $26.2 million. Duragas, with sales of 300,000 metric tons/year, has a 49% share of Ecuador's LPG market. The firm has four bottling plants and five distribution centers. The move complements Repsol's Latin American LPG production (OGJ, Nov. 3, 1997, p. 19).

Drilling-production

Shell Australia Ltd. is seeking to slow the pace of drilling in the Cornea discovery area following a number of disappointments. The group last year offered to drill more than 40 wells on the structure after the initial oil discovery in the Browse basin off northwestern Western Australia opened up a new region to exploration. Shell now wants to suspend work on Cornea for at least a year to evaluate geological information on what has turned out to be a very complex structure.

Talisman Energy Inc.,
Calgary, tested two natural gas wells in Alberta's central foothills. A discovery at Cordel flowed on test at a rate of 21 MMcfd, and a step-out well at Lovett River flowed 18.5 MMcfd. Talisman has a 57.14% working interest in the Lovett River well and a 100% interest in the Cordel well. The Lovett well was drilled to 14,928 ft, including a 2,543-ft horizontal open-hole section in Mississippian Turner Valley. The Cordel well was drilled to 14,583 ft, including a 2,290-ft Turner Valley open-hole section. Another horizontal well at Cordel was spudded July 25 and is expected to reach Turner Valley in October.

The $150 million (Australian) hull
of the floating production, storage, and off- loading vessel Northern Endeavour, to be used in Woodside Petroleum Ltd.'s Laminaria and Corallina oil fields in the Timor Sea, has been completed on schedule. The 273-m long, 50-m wide hull was towed from Samsung Group's shipyard in Koje, South Korea, and is expected to arrive in mid-August at Singapore's Sembawang shipyard, where topsides modules containing the oil processing equipment are being fabricated. Other modules being fabricated at Fremantle, Western Australia, will be fitted to the vessel in Singapore early in 1999. The hull will be towed to the field in August 1999, with first oil slated for October 1999.

Terminals

Mobil Oil and Jamuna Oil Co., Chittagong, Bang- ladesh, signed joint-venture contracts for the construction of an LPG import terminal and lubricant oil blending plant on land owned by Jamuna at Chittagong port. Total cost of the project is estimated at $25 million. The terminal will have an initial storage capacity of about 80,000 metric tons. The blending plant, expected to come on stream by yearend 1999, will have a single-shift capacity of 16,000 tons/year.

Equilon Enterprises Co. LLC,
a joint venture of Texaco Inc. and Shell Oil Co., signed a letter of intent to merge Oiltanking Houston Inc.'s Pasadena, Tex., refined products terminal with the nearby Equilon Colex pipeline injection terminal. The consolidated terminal will operate under the name Oiltanking Pasadena LLC. It will have 1.6 million bbl of capacity for products blending and storage, tie-ins to most of the major transcontinental pipeline systems, and connection to the major Gulf Coast refineries. It also will be connected to Oiltanking Houston's deepwater docks for receipt of refined products from marine vessels.

Cogeneration

NOVA Corp. and CU Power International Ltd. (Cupil), both of Calgary, formed a joint venture to build a 400-MW natural gas-fired cogeneration power plant at NOVA's Joffre, Alta., petrochemical complex. The plant is expected to cost $320 million (Canadian). It will be owned jointly but operated by Cupil. The plant will supply all of the NOVA complex's steam and power requirements. The plant is scheduled to start up early in 2000, in advance of NOVA's third ethylene unit and second polyethylene plant, both of which are under construction.

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