INDUSTRY BRIEFS

Spills

U.S. Environmental Protection Agency sued Texaco Inc., alleging that the oil company spilled more than 500,000 gal of oil and contaminated water into tributaries of the San Juan River running through Navajo lands in San Juan County, Utah. The suit claims Texaco violated the federal Clean Water Act; EPA is seeking a court order forcing Texaco to take action to prevent future spills and to pay a penalty that could reach $2.5 million. EPA claims Texaco caused 88 spills from its pipeline system during December 1991-January 1998.

Cogeneration

Abu Dhabi National Oil Co. (Adnoc) let a $600 million contract to Asea Brown Boveri Ltd., London, to build a 500 MW gas-fired power station and an 8 million gpd desalination plant. The plant will be built at Adnoc's Ruwais refinery, where it will increase available generating capacity to 700 MW. The plant is expected to start up by 2000 and use four gas turbine-generator sets and associated heat-recovery steam generators.

Energy marketing

PG&E Energy Services and ARCO formed an energy alliance in California. PG&E will provide power and energy management services to ARCO facilities in the state currently served by investor-owned electric utilities. Under the multiyear agreement, PG&E Energy Services, a unit of PG&E Corp., will supply $60 million/year worth of electricity to more than 350 ARCO owned and operated retail gas stations and convenience stores, 8 gasoline distribution terminals, 16 pipeline pump stations, and several oil and gas production facilities. ARCO franchisees can enter into private contracts with PG&E for delivery of electricity.

Exploration

Texaco Inc. subsidiary Texas Petroleum Co. and Shell Exploration & Production Colombia BV signed agreements with Colombian state oil firm Ecopetrol to explore off Colombia's Guajira province. Texaco and Shell will each hold 50% of Macuira and Nazareth blocks, with Texaco as operator. The blocks cover a combined area of 51,000 sq km; water depths are as much as 3,000 m. Acquisition of seismic, magnetic, and gravity data is expected to begin in fourth quarter. In the event of a discovery, Ecopetrol will take a 50% stake in the blocks, with Texaco's and Shell's interests being reduced to 25% each.

Cairn Energy plc,
Edinburgh, reports a gas find in the Ravva field contract area in India. Operator Cairn, which holds a 22.5% interest in the field, said RX-3 well, northeast of the main Ravva field, found gas in the primary objective sandstone and a new gas pool in a shallower formation. On test, the well flowed a combined 45 MMcfd of gas and 400 b/d of liquids through a 1-in. choke. The well will be suspended as a future gas producer.

Esso Exploration Angola Ltd.'s
Marimba well on deepwater Block 15, about 225 miles northwest of Luanda, flowed on test 6,800 b/d of oil. The well was drilled in 4,230 ft of water. The first discovery, Kissanje, is about 10 miles east of Marimba, Angola (OGJ, Mar. 23, 1998, p. 36). Appraisal work is planned. Participants in the block are: operator Esso 40%, BP Exploration (Angola) Ltd. 26.67%, Agip Angola Ltd. 20%, and Norway's Statoil 13.33%.

Apache Corp.,
Houston, will acquire a 50% interest and operatorship of two Bohai Bay exploration blocks in water as deep as 70 ft from Texaco Inc. The blocks cover 1.5 million acres and will increase Apache's gross acreage position in China 30-fold. Block 09/18 comprises 578,000 acres, Block 11/19 934,000 acres. The blocks are located, respectively, east and southeast of Apache's Zhao Dong block, where the company's 15,000 b/d C-4 discovery well was completed last year. Apache also has access to existing 2D and 3D seismic data covering most of the blocks. Initial drilling is planned for 1999.

Lasmo plc,
London, reported a discovery on Block 208 in Algeria. Lasmo said El Merk North-1 well was drilled to 3,625 m TD and encountered 36 m of net pay in the Triassic. The well flowed 21,394 b/d of 47° oil and 15.3 MMcfd of gas on test, through three 11/2-in. chokes. A deeper formation was also tested and flowed 585 b/d of oil and 35.7 MMcfd of gas. Lasmo said the find showed the greatest flow rate achieved to date on the block, where operator Anadarko Algeria Corp. expects to begin production by midyear.

Gas marketing

Southern California Edison instituted a long-term risk management program for natural gas options, structured by Coral Financial Products & Services, a unit of Houston-based Coral Energy LP. Coral said the program will help mitigate financial risks SoCal Ed faces under a restructured electricity market. SoCal Ed purchased 740 bcf of gas options in February.

Drilling-production

Oil & Natural Gas Corp. (ONGC) of India contained a Mar. 15 blowout on its Gandhar oil well in Gujarat province after the well encountered a gas kick. Wild Well Control Inc., Spring, Tex., worked for 5 days to bring the blowout under control.

Pride International Inc.,
Houston, will pay $85 million to acquire the MSV Amethyst dynamically positioned, self-propelled semisubmersible drilling rig from DWC Amethyst NV. Rated for 4,000-ft water depths, the rig is working off Brazil for Petroleo Brasileiro SA under a charter and services contract that ends in 2001. Pride also is participating in joint ventures to construct, own, and operate six enhanced Amethyst-class semisubmersibles. These rigs will be chartered to Petrobras for 6-8 year terms, with delivery scheduled late in 1999 and in 2000.

Lasmo Venezuela BV,
a unit of Lasmo plc, announced first oil from its Dacion area in eastern Venezuela. Current production is 11,650 b/d. Lasmo acquired rights to redevelop existing fields and explore in the Dacion area late in 1997. A major program is under way to acquire 3D seismic, drill new production wells, work over existing wells, and construct new production facilities. Lasmo plans to increase gross production to 90,000 b/d by 2001.

Lateral Vector Resources Inc.
(LVR), Saskatchewan, signed an investment production and development agreement with Ukranafta JSC, a Ukrainian firm, to develop the Bugruvativske oil field in northeastern Ukraine. Project partners are: Ukranafta 52%, LVR 38%, and Ukranian-registered company operator IPEC 10%. LVR controls 85% of IPEC; remaining shares are held by local investors. Including IPEC's share, LVR is responsible for funding 100% of drilling work and 48% of the overall project costs.

U.S. Minerals Management Service
proposed a rule to require operators to file 100% of their reports electronically. MMS now receives electronically about 80% of royalty data and 60% of production data. Electronic filing has reduced error correction costs 20%, manual data entry costs 60%, and file maintenance costs 24%, MMS claims. Time savings would also extend the due date for production reports by 10 days. MMS said companies filing electronically have reduced the cost of complying with reporting requirements by as much as 50%.

Pipelines

Wild Rose Pipe Line Inc., Calgary, let a $150 million (Canadian) contract to BFC Pipelines, a unit of BFC Construction Corp., Toronto, to lay a 540-km pipeline in northeastern Alberta between Hardisty and Suncor Energy Inc.'s production facilities near Fort McMurray. Construction is scheduled for May 1998-March 1999. The project is subject to regulatory approval by the Alberta Energy and Utilities Board.

British-Borneo Petroleum Syndicate plc
will acquire a 16.67% interest in Discovery Producer Services LLC and its subsidiary Discovery Gas Transmission LLC for $83.3 million. British-Borneo also has the right to increase its ownership to 33.3% during the next 3 years. The Discovery Project, co-owned by Texaco Inc. and Williams Cos., is a new gas pipeline system in Louisiana consisting of a major offshore and onshore natural gas pipeline and a processing and fractionation system in the southern part of the state (OGJ, Apr. 28, 1997, p. 38).

Interprovincial Pipe Line Inc.
(IPL), Edmonton, let a $100 million (Canadian) contract to BFC Pipelines to construct a 440-km loop line, subject to regulatory approval by Canada's National Energy Board (NEB). The work would be done in an existing IPL pipeline corridor between Kerrobert and Langbank, Sask. Construction is planned for September through December.

NEB
approved Trans Quebec & Maritimes Pipeline Inc.'s application for a $273 million natural gas pipeline and related facilities from Lachenaie, Que., to East Hereford, Que., on the New Hampshire border. The project will connect with the planned Portland Natural Gas Transmission System to New England and is scheduled to be on line Nov. 1. It will move 185.9 MMcfd of gas to New England and Quebec in the first year of operation and increase deliveries to 258.7 MMcfd in the second year.

Alliance Pipeline LP,
Calgary, let contracts worth $1.075 billion that will enable start-up of the Alliance system late in 2000. Canadian main line pipe supply contracts totalling $455 million were let to Ipsco Inc., Regina, Sask.; Welland Pipe Co., Welland, Ont.; Camrose Pipe Co.; and Berg Steel Pipe Corp., Panama City, Fla. U.S. pipe contracts were let to Napa Pipe Corp. and Berg for $500 million. Napa and Camrose are affiliates of Oregon Steel Mills Inc. Nuovo Pignone, a unit of General Electric Co., will supply 17 main line compressor packages worth $120 million.

Catalysts

CRI International Inc., Houston, is bringing on-line two 10 million lb/year antiCAT plants: one at its Medicine Hat, Alta., plant and one at its Singapore plant. CRI claims the new plants will double its capacity for ex-situ presulfiding of hydroprocessing catalysts. Start-up and commissioning began Mar. 16 for the Medicine Hat plant, Mar. 30 for the Singapore plant.

Companies

Seagull Energy Corp., Houston, will acquire BRG Petroleum Inc., Tulsa, for $102 million cash. The acquisition includes onshore oil and gas properties in East Texas and western Oklahoma involving oil and gas reserves of 102 bcfe. Production from the properties net to the combined BRG interests averaged 18 MMcfd of gas and 400 b/d of oil and NGL in 1997. The transaction is expected to close by early June.

Petroleos de Venezuela SA and Honeywell Corp. formed an alliance to market Venezuela's Water Oil Content Analyzer (WOCA). Honeywell also will build $23 million in automation equipment to be used at the Petrozuata heavy oil project in the Orinoco oil belt of Venezuela (OGJ, July 8, 1996, p. 62). Petrozuata is a joint venture of Conoco Inc. and Pdvsa.

Petrochemicals

Union Carbide Corp. and Malaysian state firm Petronas formed a joint venture to build and operate an integrated chemicals complex at Kertih, Malaysia. The facility will include a 600,000 metric ton/year ethane-propane cracker. Ethylene output from the cracker will be used to produce 385,000 tons/year of ethylene oxide and 365,000 tons/year of ethylene glycol. Other products will include 75,000 tons/year of ethanolamines and 140,000 tons/year of butanol. The complex will process ethane and propane from a Petronas gas-extraction plant. Start-up is slated for 2001.

Oriental Petrochemical Corp.,
a new unit of Egyptian-based Oriental Weavers Group's petrochemicals division, let a ?10 billion contract to Toyo Engineering Corp., Tokyo, to construct a 120,000 metric ton/year polypropylene plant at Alexandria. The project is Egypt's first in the petrochemical sector to be undertaken by a private company. Completion is set for late in 2000. Toyo is responsible for design, procurement, construction, and testing.

Saudi Basic Industries Corp.
(Sabic) let contract to Japan's Mitsui Corp. to construct an ethylene and propylene plant for its Petrokemya unit. The plant will produce 800,000 metric tons/year of ethylene and 275,000 tons/year of propylene. Sabic subsidiary Al Sharq will use the ethylene to make ethylene glycol and polyethylene (OGJ, Mar. 9, 1998, p. 43). Ibn Zahr, another Sabic unit, will use the propylene to produce polypropylene.

Dow Chemical Co.
and Amoco Chemical Europe SA will form an equity venture to expand ethylene capacity to 1.7 million metric tons/year from 1.1 million tons/year at Dow's Terneuzen facility in The Netherlands. Dow will own 80% and Amoco 20% in the venture, which consists primarily of olefin units at the complex. The expansion consists of revamping the crackers and constructing related facilities. The plant will come on stream in 2000. Amoco and Dow expect to use the increased output in their plants in Northwest Europe.

Plans for a $500 million
naphtha cracker in the Philippines were postponed after the government and private investors were unable to agree on proposed tariffs. A group of local and foreign investors, including Japan's Sumitomo Corp. and Mitsubishi Corp. and led by the Chemical Industries of the Phillippines, asked that polypropylene and polyethylene tariffs be increased to 20% from 10%. Philippine President Fidel Ramos has twice refused to increase tariffs, citing a need to further deregulate the country's petrochemical industry.

Refining

Clark USA Inc. let a contract to a unit of Foster Wheeler Corp., Clinton, N.J., to lead and perform a major expansion and conversion of Clark's Port Arthur, Tex., refinery as part of an agreement with Petroleos Mexicanos (OGJ, Apr. 6, 1998, Newsletter). The project will increase the refinery's distillation capacity to 250,000 b/sd from 195,000 b/sd while upgrading the refinery to process heavy, sour Maya crude. The expansion and conversion of the refinery will include Foster Wheeler's delayed coking technology.

Koch Industries Inc.,
Wichita, will acquire a condensate splitter from Goldman Sachs Group LP. The Rotterdam plant fractionates 70,000 b/d of condensate and light crude oils to produce jet fuel, gas oil, naphtha, and residual fuel. Built in 1994, the facility is owned and operated by Euro-Splitter BV, a unit of Goldman Sachs.