INDUSTRY BRIEFS

Courts

Maui Mining Cos., Auckland, reached a settlement in litigation between it and the New Zealand government. The government will pay $56 million to Maui Mining, which is composed of Shell (Petroleum Mining) Co., Todd Petroleum Mining Co., and Fletcher Challenge Energy Ltd., all of New Zealand. The litigation concerned interpretation of the 1973 Maui offshore gas field sale and purchase contract between the government and Maui Mining. The settlement agreement resolves all outstanding issues.

Energy marketing

Enron Comercializadora
de Energia Argentina (ECEA), a unit of Enron Corp., was granted a power marketer license in Argentina. The license, which Enron says is the country's first, permits ECEA to buy and sell electricity as a member of Argentina's electricity pool, Mercado Electrico Mayorista. Enron will also offer physical delivery of energy commodities, financial energy products, and risk management. Enron is a 35% owner of Argentina's 4,104-mile Transportadora de Gas del Sur (TGS) pipeline system.

Refining

Texaco Inc. and Messer Griesheim GmbH formed a joint venture, Singapore Syngas Pte. Ltd., to own and operate a gasification plant on Jurong Island, Singapore. The plant will supply carbon monoxide to an acetic acid plant being built by Hoechst Group's Celanese unit. The Singapore Syngas plant, to begin operations late in 2000, will gasify 600 metric tons/day of low-value refinery feedstocks from Singapore Refining Co.'s (SRC) 270,000 b/d refinery on nearby Pulau Merlimau. The plant will produce 900 tons/day of CO, which Celan- ese will buy, and up to 25 MMscfd of high-purity hydrogen, which SRC will buy.

Nigerian National Petroleum Corp.
(NNPC) plans to spend $92 million for turnaround maintenance of its 150,000 b/d and 60,000 b/d refineries at Port Harcourt. The 60,000 b/d refinery has been idle for more than a year. Meanwhile, Total International is expected to begin turnaround maintenance of Nigeria's 110,000 b/d refinery at Kaduna. Maintenance contracts for NNPC's 125,000 b/d plant at Warri have not been let.

Petrochemicals

BP Chemicals Inc. plans to build a 500,000 metric ton/year ethylene unit in Oman. Construction of the plant, a joint venture with Oman, may be delayed due to Asia's economic slowdown, which has crimped demand for Middle East petrochemicals.

Hyundai Petrochemical Co.
completed construction of its second $1 billion petrochemical complex at Daesan, South Korea. The plant, with ethylene capacity of 550,000 metric tons/year, makes Hyundai South Korea's largest ethylene manufacturer, with a production capacity of 1 million tons/year. Hyundai Petrochemical will also manufacture 1.1 million tons/year of polymers, including low-density polyethylene, high-density polyethylene, and poly- propylene. Meanwhile, Hyundai Oil Refinery Co. has completed an aromatics plant that produces 400,000 tons/year of benzene, toluene, and xylenes, also at Daesan.

Shell Chemical Co.
plans two debottlenecking projects at its U.S. Gulf Coast olefins plants. The first project, at Shell's Norco, La., plant, will increase ethylene capacity by 500 million lb/year from 2.9 billion lb/year and propylene capacity by 200 million lb/year from 2 billion lb/year. Project completion is expected by yearend 1999. A second project, under consideration for Shell's Deer Park, Tex., plant, will increase ethylene capacity by 750 million lb/year from 2.1 billion lb/year and propylene capacity by 400 million lb/year from 1.1 billion lb/year. Shell expects to have this new capacity on-line by 2001.

ICI Pakistan
started up a $490 million purified terephthalic acid (PTA) plant at Port Qasim, Pakistan. The 400,000 metric ton/year plant is near BOC Pakistan's nitrogen and hydrogen generating facility, from which ICI will purchase industrial gases. E.I. Dupont de Nemours & Co. Inc. is planning to take a 50% stake in the PTA plant, as part of its acquisition last year of ICI's polyester business.

Drilling-production

Cabinda Gulf Oil Co. Ltd., a unit of Chevron Corp., reported first oil from Lomba oil field in 400 ft of water 40 miles off Angola's Cabinda enclave. Chevron and its partners in Block O Cabinda Association-state-owned Sonangol, Agip Angola Ltd., and Elf Angola-reported Lomba is producing 15,000 b/d, with output expected to rise to 27,000 b/d by November. Crude oil will be transported by pipeline to Cabinda Gulf's Malongo terminal.

Leviathan Gas Pipeline Partners LP,
Houston, started up its four-pile production platform with processing facilities on East Cameron Block 373 in the Gulf of Mexico. In addition to the platform, Leviathan, as contractor for Stingray Pipeline Co., constructed a 13-mile, 16-in. pipeline, extending the Stingray pipeline system from East Cameron Block 338 to the new platform. Kerr-McGee Corp. began drilling from the platform and has committed to ship production from multiple blocks in the East Cameron and Garden Banks areas through the Stingray system, which is 50% owned by Leviathan.

Apache Corp.,
Houston, reported first oil from its Stag platform off northwestern Western Australia. Output from five horizontal wells is expected to reach 25,000 b/d by mid-June. The $150 million project is in 150 ft of water, 37 miles northwest of Dampier, W.A. Interest holders are operator Apache 33.3%, Santos Ltd. 54.2%, and Globex Far East 12.5%. Oil flows from a central processing facility on the platform through an 8-in. pipeline to a catenary anchor-leg mooring buoy about 1.2 miles away. The buoy forms a mooring for a 700,000 bbl floating storage and off- loading vessel.

Scimitar Production Egypt Ltd.,
a unit of Scimitar Hydrocarbons Corp., Calgary, signed a petroleum service agreement with state firm Egypt General Petroleum Corp., to increase output from Issaran oil field. Issaran is an onshore field, 200 km southeast of Cairo along the Gulf of Suez, that produces 850 b/d of 10.5-18° gravity oil from three wells from zones less than 800 m deep. Scimitar will implement an enhanced oil recovery program.

Amoco Trinidad Oil Co.'s
SEG-17 well discovered an additional crude oil reservoir while confirming a discovery the company made off Trinidad in January (OGJ, Feb. 2, 1998, Newsletter). Drilled 2 miles south of Immortelle No. 9 discovery well, SEG-17 cut 260 ft of combined oil pay in four sands. Hydrocarbons were present in seven sands at 7,900-12,000 ft. Amoco now estimates crude reserves in Immortelle-Amherstia field complex at 50-100 million bbl. The field is 35 miles southeast of Galeota Point in 240 ft of water and produces 9,000 b/d of oil and about 180 MMcfd of natural gas.

Shell Deep Water
Development Systems Inc.
let a 4-year contract to MFRI Inc., Niles, Ill., and partner Bayou Pipe Coating Co., New Iberia, La., to provide insulation and jacketing for subsea flow lines in the Gulf of Mexico. The flowlines will be used by Shell to connect existing platforms to remote subsea wells in deep water. The initial shipments for 60 miles of line pipe are scheduled for delivery in August. Shell declined to identify which platforms will be connected.

Exploration

Kerr-McGee Oil & Gas Corp., a unit of Kerr-McGee Corp., signed a deepwater exploration agreement with BP Exploration & Oil Inc. Kerr-McGee acquired a 50% working interest in 24 deepwater Gulf of Mexico blocks that were previously owned 100% by BP Exploration. Water depths are 3,500-5,500 ft, with the first well planned for late second quarter.

Fina Inc.,
Dallas, reported its wildcat in Hidalgo County, Tex., found 150 ft of gross gas sands pay in the Vicksburg formation at depths below 15,000 ft. On test and after fracture treatment, Wilson No. 1 flowed 15 MMcfd through a 20/64-in. choke with flowing tubing pressure of 9,235 psi. Operator and 75% owner Fina plans delineation drilling on its 6,000-acre lease, which is south of McAllen Ranch field. Houston-based Seagull Energy Corp. holds a 25% working interest in the lease.

CalEnergy Co. Inc.,
Omaha, reported that CalEnergy Gas (UK) Ltd., its wholly owned U.K. gas exploration and production subsidiary, entered into an option agreement with Boral Energy Resources Ltd. and Premier Petroleum (Australia) Ltd. to earn interests in three permits in southeastern Australia's Bass basin. Yolla gas field is included in the permits. Under the terms of the option agreement, CalEnergy will contribute to the cost of drilling as many as three wells-one exploration and two appraisal-to earn a working interest in the three permits.

Pipelines

China National Petroleum Corp. (CNPC) and partners began laying an export pipeline tied to development of oil fields in south-central Sudan. The 1,500-km pipeline will extend from the concession to a marine terminal to be built near Port Sudan on the Red Sea. The group began laying 28-in. pipe near Port Sudan and along another stretch of the route, near Khartoum. Completion of the pipeline is slated for mid-1999. Initial throughput capacity will be 250,000 b/d of oil. Interest holders are CNPC 40%, Malaysia's Petronas Carigali Overseas Sdn. Bhd. 30%, Calgary's Arakis Energy Corp. 25%, and Sudanese state firm Sudapet Ltd. 5%.

Alliance Pipeline Group
secured $3.6 billion (Canadian) in loans for its natural gas and liquids pipeline project from Northeast British Columbia to the Chicago area (OGJ, Apr. 13, 1998, p. 38). An international group of 42 banks will finance the project once Canada's National Energy Board gives approval. The pipeline would move 1.3 bcfd of gas and has a proposed mid-2000 start-up date. Alliance said the loan is the largest project-specific, non-recourse financing arranged in North America.

U.S. Minerals Management Service
compiled digital coordinate data of all oil and gas pipelines in federal waters of the Gulf of Mexico. The data, covering more than 20,000 miles of lines, will be accessible via the Internet and the agency's public information office.

Duke Energy Trading & Marketing LLC,
Houston, will provide up to 50 MMBTU/day of natural gas to BC Gas Utility Ltd. beginning November 1999. BC Gas received British Columbia Utilities Commission approval for Duke Energy to deliver the gas through the Northwest Pipeline under a 15-year contract. Duke Energy T&M is owned 60% by Charlotte-based Duke Energy Corp. and 40% by Mobil Corp.

TransColorado Gas Transmission Co.,
Grand Junction, Colo., plans to begin construction of the 273-mile TransColorado Pipeline project by mid-July. Pipe will be laid in four spreads, with final work completed in mid-November 1998. When completed, the pipeline will provide open access transport for an incremental 300 MMcfd of gas. TransColorado will solicit bids from 15 preapproved pipeline contractors for the $200 million project.

Companies

Republic of Congo established a new state oil company, Soc. Nationale des Petroles du Congo (SNPC), to promote and manage the nation's petroleum resources. SNPC will market, distribute, and "fix oil prices for western firms operating in the Congo," said Minister for Hydrocarbons Jean-Baptiste Taty-Loutard. SNPC will be responsible for offshore and onshore exploration and production E&P activities.

Quicksilver Resources Inc.
and MSR Exploration Ltd., both of Fort Worth, will merge in the third quarter. MSR will be merged into Quicksilver, and their shareholders will receive common stock in Quicksilver Resources for each MSR share. The trade is expected to amount to about 20% of Quicksilver Resources outstanding shares. The combined companies would have projected revenues of $50 million. Quicksilver gains interests in 1,200 wells, with a lease inventory of 600,000 gross acres in Michigan, Montana, Wyoming, Texas, and Canada. The company's net proved reserves would be 285 bcfe.

Exports-imports

Korea Petroleum Development Corp. officials said that the new export price of oil products in South Korea will likely emerge as the standard price of petroleum goods shipped to North Asian importers, including China and Japan. The fob South Korea price was placed in service for major domestic oil companies and foreign firms investing in South Korea in time for the upcoming full oil market opening. Until now, the only standard oil price system in Asia had been fob Singapore, which South Korea has depended on for exports, officials said. Annual exports of oil products by Singapore and South Korea amount to $350 million and $230 million, respectively.

LNG

Pohang Iron & Steel Co. (Posco), Pohang, South Korea, secured $300 million from Japan's Export-Import Bank to build an LNG terminal. The terminal will be built at Kwanyang, South Korea, by South Korean and Japanese partners; the Japanese group will likely be led by Mitsubish Heavy Industries Ltd., Tokyo. Details of the project, including participants, have yet to be finalized. The proposal came after Posco Chairman Yoo Sang-boo visited Japan in April. Yoo was president of Samsung Corp.'s Japanese unit.

Qatar Liquefied Natural Gas Co.
signed an amended sales accord with Enagas, Madrid, to deliver an additional 260,000 tons of LNG between October and December. The original sales agreement was for 420,000 tons. Enagas also has an option for five more deliveries during the first quarter of 1999.

Environment

U.S. District Court in Anchorage, Alas., fined Doyon Drilling Inc. $1 million for disposing of paint thinner, paint, oil, and solvents in wells on Endicott Island off northern Alaska. Doyon pleaded guilty to 15 counts and agreed to spend $2 million to train employees on environmental compliance. One former employee was sentenced to a year in jail and another to 4 months of home confinement. They were fined $25,000 each.