July 13, 1998
U.S. Minerals Management Service


U.S. Minerals Management Service let contract to PCCI Inc., Alexandria, Va., to evaluate existing and emerging technologies for contending with oil spills from deepwater blowouts. The work will include a critical component analysis to determine probable failure points, identification of technical hurdles to stopping oil flows, a patent search of blowout containment devices, and development of potential technologies and equipment for sensing, tracking, containing, and recovering subsea oil from deepwater blowouts. Wild Well Control Inc., Houston, and Noren AS, Blomsterdalen, Norway, will participate in the study.


Abu Dhabi Gas Industries Ltd. let a $30 million engineering, procurement, construction, and commissioning contract to Italian firm Techni-Geoproduction for control system modernization at its Ruwais NGL fractionation plant and terminal. Construction will be completed late in 2000.


Total acquired 100% equity control of PB Gaz Szerviz, Hungary's state-owned LPG retailer and bottler. Total previously held a 57% stake in the company, while Hungary's national oil company Magyar Olaj es Gazipari Rt. held 43%. In 1997, PB Gaz had $29 million in LPG sales and a 20% share of the Hungarian market.


Tennessee Valley Authority
(TVA) agreed to purchase up to 240,000 MMcfd of natural gas from Columbia Gulf Transmission Co. A 2.3-mile, 12-in. pipeline will connect Columbia's main line to TVA's 1,500-MW plant near Gallatin, Tenn. Service will begin this fall.

The Yadana gas pipeline
from Myanmar to Thailand has been completed. The line will bring gas from Yadana gas fields in the Gulf of Martaban to a power plant outside Bangkok. Peak capacity will be 525 MMcfd. The 270-km Thai section of the line was built by the Petroleum Authority of Thailand; the 410-km Myanmar section was built by Total and Unocal Corp. The pipeline will be tested then put in service in October, 3 months after the target in-service date of July 1. Environmental activists protested the 680-km line while it was under construction, causing the delay (OGJ, Feb. 16, 1998, Newsletter).

Royal Dutch/Shell
and joint venture partner Occidental Philippines Inc. by yearend will let $800 million in contracts for construction of a natural gas pipeline and production platform off the western Philippines. The plant is part of the JV's $2 billion development of Camago/ Malampaya gas fields in 3,000 ft of water. The project includes laying a 24-in. 504-km subsea pipeline from the fields to Batangas to supply two planned gas-fired power plants. Gas deliveries will begin Oct. 1, 2001. The JV awarded a $100 million contract to Mitsubishi Corp. to manufacture the pipe.

U.S. Environmental Protection Agency
issued a rule regulating management of polychlorinated biphenyls (PCBs) that takes effect Aug. 28. The American Gas Association (AGA) said the rule takes a practical approach to PCB management in gas utility systems. AGA said PCBs are sometimes present in gas pipelines because of migration of small amounts of compressor oils or lubricants.

Questar Pipeline Co.,
a unit of Questar Corp., Salt Lake City, plans to purchase ARCO Pipe Line Co.'s Line 90 and associated Lines 91 and 92 for $40 million. The crude oil pipelines extend 700 miles from New Mexico's Paradox basin to Long Beach, Calif. Questar will seek approval to convert Line 90, built in 1957, to natural gas service, with a capacity of 120-130 MMcfd. Questar will recondition the line and add compression stations within 18-24 months.

Gas distribution

New Brunswick Department
of Natural Resources
is inviting bids for the first stage of a two- stage project to develop facilities for natural gas distribution in the province. Companies should file documents demonstrating timely development of gas distribution infrastructure construction, its regulation, access to indigenous natural gas supply, and maximum economic benefits to the province. Following Stage 2 submissions, which require more detailed company financial information, a franchise or franchises will be awarded in December.

Gas storage

Petal Gas Storage Co., a subsidiary of Shreveport, La.-based Crystal Oil Co., will expand its salt cavern storage facility near Hattiesburg, Miss., by 5 bcf, of which 3 bcf will be working gas. The project will increase total storage capacity at the site to 10.2 bcf and boost withdrawal capacity to 600 MMcfd. The cavern is connected to Tennessee Gas Pipeline Co. and Koch Gateway Interstate pipelines. The expansion will include interconnects with Williams Cos.' Transco pipeline, a Southern Natural Gas Co. line, and the Destin pipeline. Petal will seek authorization for the expansion from the Federal Energy Regulatory Commission.


Elf Exploration Angola Ltd. and partners let a $415 million contract to Alto Mar Girassol-a joint venture of Bouygues Offshore SA, ETPM SA, and Stolt Comex Seaway BV-for work related to development of Girassol field on Block 17 off Angola. JV members each will receive one third of the contract value. The JV will design, engineer, fabricate, and install flow lines, umbilicals, and risers. Block partners are operator Elf 35%, Esso Exploration Angola (Block 17) Ltd. 20%, BP Exploration (Angola) Ltd. 16.67%, Statoil 13.33%, Norsk Hydro ASA 10%, and Fina Exploration MBV 5%.

Shell Offshore Inc.
began oil and gas production from the first subsalt well in Enchilada field in the Gulf of Mexico. The Enchilada field includes Garden Banks Blocks 83, 84, 127, 128, and 172 and is 185 miles southwest of New Orleans. Chimichanga well, on Garden Banks Block 127, came on stream at an initial rate of 20 MMcfd of gas and 2,100 b/d of oil. It was drilled through a 1,300-ft thick salt tablet at 9,269-13,287 ft TVD. Water depth at the well location is 630 ft. Chimichanga is jointly owned by Shell Offshore, Amerada Hess Corp., and Pennzoil Exploration & Production Co.

let a $95 million contract to Coflexip Stena Offshore (CSO) Norge to supply a flexible riser system for ?sgard B development (OGJ, Aug. 25, 1997, p. 83). CSO will install 24 dynamic risers in the reverse pliant wave and lazy S configurations. Risers will include: two 9-in. gas injection risers, one 9-in. produced water injection riser, four 14-in. gas export risers, two 16.6-in. gas production risers, and one multibore glycol riser. The high-pressure produced water/gas injection and production risers will use, respectively, the Teta and Coflon technologies. Delivery of the system is slated for March 2000.

Chevron USA Inc.
let a $3 million, 3-year operations and maintenance contract to Michael Baker Corp. unit Baker Energy, Houston, for the Genesis deepwater drilling-production floating spar platform in the Gulf of Mexico. Baker will be responsible for operations and maintenance of all production systems and equipment not related to drilling operations. The platform lies in 2,700 ft of water on Green Canyon Block 205 (OGJ, June 29, 1998, p. 40). Genesis production is slated to begin late this year at an initial rate of 12,000 b/d. By 2000, production is expected to be 55,000 b/d of oil and 72 MMcfd of gas.

completed Phase 3 of Thailand's Bongkot gas development. Gas output should increase 40%, to 550 MMcfd from 350 MMcfd. Total says the Phase 3 production is equivalent to about 35% of Thailand's natural gas demand. Partners in Bongkot field include PTT Exploration & Production plc (Pttep) 40%, operator Total 30%, BG plc 20%, and Statoil 10%. Total is handing over operatorship of the field to Pttep this month.

Products marketing

Conoco Inc. and Malaysia's Sime Darby Bhd. formed a joint venture to sell refined petroleum products in Malaysian retail markets. Sime Darby Holdings Inc. will hold a controlling 51% share in the new company, called Sime Conoco Energy Sdn. Bhd.; Conoco Jet (Malaysia) will hold a 49% stake.


Alberta Court of Queen's Bench gave final approval to the merger plans of TransCanada PipeLines Ltd. and NOVA Corp. (OGJ, July 6, 1998, p. 39).

Nicor Inc.,
Naperville, Ill., and Houston-based Dynegy Inc. (formerly NGC Corp.) formed a strategic alliance to pursue wholesale 50-500 MW power generation and cogeneration projects in six U.S. Midwestern states. The companies say each project will cost up to $250 million. The alliance will focus on new power plant construction, cogeneration projects, and acquisition of power generation assets in Illinois, Wisconsin, Indiana, Iowa, Minnesota, and Missouri.

Swift Energy Co.,
Houston, agreed to purchase for $87.6 million certain producing properties from Houston-based Sonat Exploration Co., a unit of Sonat Inc. The properties have proved reserves of 91.1 bcfe, of which 56% is natural gas, and production of about 70 MMcfd. Included are: interests and production facilities in southeast Texas' Brookeland field and western Louisiana's Masters Creek field; 20% interests in the Brookeland and Masters Creek NGL plants; and more than 200,000 undeveloped net acres. Swift says it will schedule all future drilling activity "only after economic drilling conditions improve."

The second downstream joint venture
of Shell Oil Co., Texaco Inc., and Saudi Aramco began operating. Motiva Enterprises LLC combines the firms' U.S. East and Gulf Coast refining and marketing assets (OGJ, June 1, 1998, Newsletter).


Alexandria Petroleum Co., Alexandria, Egypt, awarded a $170 million turnkey contract to Technipetrol SpA, the Italian unit of French engineering firm Technip, for design and construction of a 700,000 metric ton/year naphtha reformer for its 95,000 b/d Alexandria refinery. The contract includes a CCR Platformer and associated hydrotreating and isomerization units, all using UOP technology. Technipetrol also will install an LPG recovery unit, a sour water stripper, utilities, and offsites. Project completion is scheduled for first quarter 2000.

Saras SpA
let contract to a unit of Parsons Corp., Pasadena, Calif., for engineering, procurement, and construction management of a $65 million mild hydrocracker, to be built at Saras' 285,000 b/d refinery at Sarroch, Sardinia. Parsons will be assisted by Siirtec-Nigi and Uhde Bombay. The plant is scheduled to be on stream by March 2000.

Poland's Petrochemia Plock SA
let a $33 million contract to Technipetrol for a 600,000 metric ton/year isomerization unit and a 460,000 ton/year light naphtha hydrotreater at its 260,000 b/d Plock refinery in Poland. Technipetrol will perform detailed engineering, procurement, construction supervision, start-up, and training.

approved a proposal by Indian Oil Corp. (IOC) and Kuwait Petroleum Corp. (KPC) to build a 180,000 b/d refinery at Abhyachandrapur in eastern India. The project is expected to cost 82.7 billion rupees (nearly $2 billion). IOC and KPC each will hold 26% equity in the project; the remaining 48% will be offered to the public. IOC will contribute 8.60 billion rupees. Construction is expected to take 48 months, and commissioning another 2 months.


IOC agreed in principle to build a fourth oil jetty at Haldia, India. The jetty, which will be offered to an outside party under India's privatization program, will cost 500 million rupees ($12 million). It will have capacity to handle 6 million metric tons/year of oil. After conducting a cost-benefit analysis, IOC will decide whether to construct the jetty on a build-operate-transfer basis or to make the initial investment to build the jetty and allow Calcutta Port Trust to apply the investment toward IOC's future wharfage.


Mobil Canada selected two possible sites for an upgrader to process bitumen from the planned Kearl oilsands project. Mobil will build the plant either at its Kearl mine site on Lease 36, 70 km north of Fort McMurray, Alta., or in the Edmonton area. A final decision is expected in fourth quarter. The Kearl mine will produce about 130,000 b/d. Mobil expects the upgrader to cost $1-1.5 billion (Canadian).


Fina Exploration Minh Hai, a subsidiary of PetroFina SA, Brussels, made its seventh discovery on Block 46 off Viet Nam in the Gulf of Thailand (OGJ, Apr. 14, 1997, p. 33). On test, Well 46-KM-1X cut multiple gas-bearing zones and flowed a combined 36 MMcfd from two intervals. Fina is moving the rig to drill the 46-TL-1X well on the same block. Fina has a 70% in the acreage; Thailand's PTT Exploration & Production International holds 30%.

Cabinda Gulf Oil Co. Ltd.,
a unit of Chevron Corp., reported a third deepwater discovery on Block 14 off Angola's Cabinda enclave in 400 m of water (OGJ, Feb. 23, 1998, p. 81). The first well on this third structure, called Benguela, flowed 20,000 b/d of light oil on test. Delineation wells are planned this year. The find follows discovery of the giant Kuito structure also on Block 14 and discovery of a second structure-Landana-currently being assessed. Production is expected to start late in 1999. Block 14 partners are: operator Cabinda Gulf 31%, Total 20%, Angolan state oil firm Sonangol 20%, Agip 20%, and Petrogal 9%.

Energy marketing

Dynegy and Isagen SA ESP, Medellin, Colombia, agreed in principle to form the first natural gas and power marketing joint venture to operate in Colombia's wholesale electricity and natural gas markets, deregulated in 1994. Colombia consumes about 500 MMcfd of gas and 45,000 GW-hr of power.

Copyright 1998 Oil & Gas Journal. All Rights Reserved.