INDUSTRY BRIEFS

Spills

Chevron Corp. found a leak in its South Pass 49 crude oil pipeline system on South Pass Block 38 off Louisiana. Chevron said the leak may have been the source of a 3,700-bbl spill Oct. 4. The spill, which has been contained, was first thought to be from BP Exploration's Mississippi Canyon 109 pipeline. Repairs on Chevron's leak, discovered while testing the line, are expected to take 7-10 days. Following the initial leak, another 50-70 bbl of oil was released during a pressure test of the line. An investigation into the cause of the leak is under way.

Pipelines

Norway's Statoil and partners on Oct. 9 put into commercial use the $1 billion, 840-km Norfra gas pipeline linking Europe to giant Troll field off Norway (see map, OGJ, Feb. 23, 1998, p. 67). The line accounts for 30% of France's gas imports. Statoil claims Norfra is the world's longest subsea gas pipeline; it is expected to have a 50-year lifespan. Norfra was built to meet increasing gas demand in continental Europe.

Longhorn Partners Pipeline,
Dallas, is investigating an Oct. 7 line break that caused a fire during testing of a newly constructed section of its pipeline in Houston (OGJ, July 20, 1998, p. 36). The rupture discharged diesel that ignited. Longhorn called the incident "highly unusual." The extent of damage to the line is unknown.

Columbia Gulf Transmission Co.,
Houston, will lay a 16-in. pipeline from the terminus of its Paradis line to its interconnect with Evangeline Gas Pipeline in St. Charles Parish, La. The line will provide 98 MMcfd of natural gas to three electric power generation plants operated by Entergy Corp. unit Entergy Louisiana Inc. Service is to begin in December. This will be Columbia Gulf's third project to supply gas for electric power generation.

Talisman Energy Inc.,
Calgary, and partners commissioned the Lovett River pipeline system in Alberta's Central Foothills area. The 105 MMcfd system includes a 21-km, 10-in. main line and a 15-km, 6 and 8-in. gathering system. The pipeline gathers gas from five Lovett River fields for processing at the Hanlan Robb gas plant.

Refining

An explosion at ARCO's Los Angeles refinery at Carson, Calif., injured three workers Oct. 8. At presstime, ARCO still was assessing damage to the No. 2 coker unit and investigating the cause of the blast. The unit is expected to be offline for 2 weeks.

Nigeria's Warri refinery
was shut down on Oct. 12 due to power failure. The 125,000 b/d plant was Nigeria's only remaining operational refinery. Its other three, which have fallen into severe disrepair, are being overhauled with the help of foreign firms. The Warri plant's last functional turbine failed on Oct. 9, forcing the refinery to shut down.

Attock Refinery Ltd.,
Karachi, signed a $16 million loan agreement with a syndicate financing group to upgrade and expand its 80-year-old refinery. Included in the group are Al-Faysal Investment Bank of Pakistan and four local banks. The upgrade, slated for completion in May 1999, is intended to hike distillation capacity by 4,500 b/d to 35,000 b/d and maximize output of premium unleaded gasoline.

Alternate energy

The U.S. Department of Energy selected a partnership headed by Midwest Research Institute to be the management and operating contractor of the National Renewable Energy Laboratory in Golden, Colo. The 5-year contract has a potential value of more than $800 million, depending on congressional appropriations for energy efficiency and renewables programs.

Terminals

A Pakistani consortium composed of Karachi Port Trust, Port Qasim Authority, Pakistan National Shipping Corp., State Petroleum Refining & Petrochemical Corp., and National Tanker Co. intends to install a single point mooring (SPM) for the planned Iran-Pak refinery at Karachi (OGJ, Dec. 16, 1996, p. 24). The $30 million SPM, to be built near Gadani at Khalifa Point, will accommodate tankers from Iran.

Companies

Sasol Ltd. will not proceed with its planned acquisition of AECI Ltd. (OGJ, June 5, 1998, Newsletter). South Africa's Competition Board placed conditions on the transaction that would have eliminated AECI's fertilizer and explosives business from the deal. Sasol found the conditions unacceptable.

Centrica plc
bought the upstream oil and gas interests of electricity generator Powergen plc, London, for £248 million. These comprise interests in eight producing fields and several gas development prospects in the southern North Sea and the East Irish Sea. The fields have net production of more than 70 MMcfd of gas and 6,000 b/d of oil and estimated net remaining reserves of 420 bcf of gas and 12 million bbl of oil. Centrica said it has already signed contracts for 47% of Powergen's gas reserves, while 31% remains unsold.

Key Energy Group Inc.,
Denver, bought certain assets of Tulsa-based Flint Engineering & Construction Co. for $65 million. The holdings include the operating assets of HSI Group, comprised of Hellums Services II Inc., Superior Completion Services Inc., South Texas Disposal Inc., and Elsik II Inc., as well as assets of Argentina's Iceberg SA. Through this purchase, Key adds 67 well service rigs to its fleet of 16 and gains 105 oil field trucks.

A 50-50 joint venture of
Newstar Energy USA Inc., Monroe, Mich., and Fort Worth-based Omimex Energy Inc. agreed to buy the Michigan oil and gas properties of Unocal Corp.'s Lower 48 exploration and production unit, Spirit Energy 76, for $37.25 million plus 670,000 shares of Newstar Resources stock. The deal is expected to close Dec. 1. Although reserves were not disclosed, about 2,200 boed of production is included in the purchase.

Resource America Inc.,
Philadelphia, acquired Pittsburgh-based Atlas Group in a debt, cash, and stock deal worth $63 million. Resource America, now with management assets of more than $1 billion, gains Atlas's interests in 1,400 oil and gas wells and 650 miles of gas gathering pipelines in Pennsylvania and Ohio.

Talisman Energy Inc.,
Calgary, completed purchase of Arakis Energy Corp., gaining in the deal a 25% interest in a Sudan oil exploration and development project with net production of 37,500 b/d expected by 2000 (OGJ, Aug. 24, 1998, Newsletter).

Hyundai Group's
South Korean refining arm may resume negotiations for the purchase of a power plant division of Hanwha Group's ailing Hanwha Energy Co. (OGJ, Oct. 12, 1998, p. 28). Trading of Hanhwa Energy was suspended by the Korea Stock Exchange a day after an $870 million sale to U.S.-based AES Corp. fell through.

Petro-Canada Ltd.,
Calgary, has acquired a 35.24% interest in Search Energy Corp. in exchange for properties in Northwest Alberta and Northeast British Columbia. Petro-Canada valued the transaction at about $12 million (Canadian).

Drilling-production

Woodside Energy Ltd., operator of the North West Shelf Joint Venture, will perform a major retrofit of Cossack Pioneer floating production, storage, and offloading vessel (FPSO), stationed over the Wanaea/Cossack oil fields, 130 km off Dampier, W.A. The 150,000-dwt vessel will be taken off station January next year and dry docked in Dubai for the upgrade. The $190 million (Australian) work contract, including engineering, maintenance, and upgrading, will increase oil production capacity to 115,000 b/d from 90,000 b/d and gas production capcity to 100 MMcfd from 65 MMcfd.

Algerian officials
approved a 20-year agreement between state-owned Sonatrach and Amoco Algeria Petroleum Co. to develop gas fields in the In Amenas area of southern Algeria (OGJ, July 6, 1998, p. 42). Amoco plans to contribute $435 million to drill 80 wells. Amoco will also construct a 700 MMcfd treatment plant and a 100-km pipeline.

Total
announced first production from Sirri A field in the Persian Gulf off Iran. The French operator took over development of Sirri A and E fields after U.S. government sanctions forced Conoco Inc. to withdraw from the project (OGJ, July 24, 1995, p. 67). Sirri A is expected to produce 7,000 b/d of oil from three wells initially, with output building to 20,000 b/d from a total of 11 wells. Sirri E is expected to come on stream in 1999 with an anticipated plateau production of 100,000 b/d. National Iranian Oil Co. will gradually take over as operator of the two fields.

Exploration

Black Sea Energy Ltd., Calgary, bought an additional 25% interest in a Pangaea Energy International Ltd. exploration project in Peru from Vancouver, B.C.-based Pangaea. Black Sea's interest in the Block 71 project in the Ucaya* basin is now 44%. Other interests are Pangaea 44% and Murphy Oil Corp. 12%. Black Sea agreed to pay the balance of costs for completing the initial Shahuinto well on Block 71, up to a maximum of $7.5 million. The well is expected to spud Nov. 1.

American InternationalPetroleum Corp.,
New York, won government approval to spud the first of six delineation wells on its Kazakhstan license. The first well will delineate shallow gas reserves, initially estimated at 1.1 tcf gas, in Eocene pay at 2,100 ft. Logs and production tests of wells drilled previously in the area indicate gross Eocene pay of 700 m over four or five zones, with individual pay zones of 2-8 m.

Texaco Inc.
signed a production-sharing agreement with Angolan state oil firm Sonangol for the 1.2 million-acre Block 9 in the Kwanza basin, off Sumbe, 155 miles south of Luanda. Texaco, which acquired its interest in the block in 1997, shot a 2D seismic survey on the block this year and plans additional seismic work in 1999, with exploratory drilling planned for 2000. Block interests are operator Texaco 40%, Mobil Corp. 35%, Energy Africa 15%, and Norsk Hydro 10%.

Statoil
agreed in principle with Saga Petroleum AS for Statoil to undertake development of and assume operatorship of Sygna oil field in the Norwegian North Sea. Plans call for producing Sygna oil subsea and tying back the wells to Statoil's Statfjord C platform. The Sygna discovery extends across the dividing line between licenses PL 037 and 089, operated by Statoil and Saga, respectively. Development, pending approvals, is slated to begin Feb. 1, 1999, and production to start up Aug. 1, 2000, and plateau at 40,000 b/d. Sygna's reserves are pegged at 60-70 million bbl. The development is one of several put on hold recently by Norway's government (OGJ, Mar. 16, 1998, p. 34).

Gas gathering

Abu Dhabi Co. for
Onshore Oil Operations (ADCO), a unit of Abu Dhabi National Oil Co., let a $100 million contract to Italy's Snamprogetti SpA and Consolidated Contractors International Co., Athens, for engineering and construction of gas gathering facilities in Abu Dhabi. The system will transport gas from Abu Dhabi's Phase 2 onshore gas development project, which will involve production of about 1.13 bcfd from Thammama C and D fields. The contract includes 300 km of flow lines and a terminal. Construction is expected to take 28 months.

El Paso Field Services,
a unit of Houston-based El Paso Energy Corp., began start-up operations at its Global compression project in the San Juan basin. The $50 million project entails installation of 40,000 hp of natural gas compression and a 54-mile loop line and is expected to lower pressure on 70% of the wells. Partners in the project include Amoco Production Co., Burlington Resources Inc., and Conoco Inc.

Power

Coastal Corp. affiliate Coastal Power Co. gained a majority interest in a 110-MW fuel oil-fired power plant at Khulna, Bangladesh. Coastal Petroleum NV will supply fuel oil to the plant, which is expected to be operating commercially this November. W?rtsil? NSD Finland Oy built and operates the $96 million Khulna plant.

Shell Petroleum Development Co.
(SPDC) and Nigerian Gas Co. Ltd. (NGC) signed two 10-year deals covering supply of natural gas to feed power plants in Nigeria's Niger Delta. One contract covers about 66 MMcfd of gas that NGC will deliver from SPDC's Sapele gas plant to fuel a Nigerian Electric Power Authority power plant. The second contract is for 3 MMcfd, also delivered by NGC, from SPDC's Imo River field to six industrial customers in Aba.

Petrochemicals

Shell Chemicals Ltd. signed a letter of intent to sell its polyvinyl chloride and vinyl chloride monomer businesses to Shin-Etsu Chemical Co. Ltd., Tokyo. The assets include: a 50% interest in PVC and VCM plants at, respectively, Pernis and Botlekin, the Netherlands; a PVC plant at Berre, France; and a 60% interest in a VCM plant at Fos sur Mer, France. These will give Shin-Etsu capacity to manufacture 600,000 metric tons/year of PVC capacity, in addition to 550,000 tons/year in Japan, 1.45 million tons/year in the U.S., and 150,000 tons/year in Portugal. Shell Chemicals said it is divesting these businesses because it wants to focus on areas in which it has, or can achieve, global leadership.

Chevron Chemical Co.
plans to construct a world-scale, 750 million lb/year normal alpha olefins (NAO) plant at its Cedar Bayou olefins complex at Baytown, Tex. The plant, planned to start up in mid-2000, will double current NAO capacity at Cedar Bayou. Bechtel Corp., Houston, will handle engineering, procurement, and construction.

Copyright 1998 Oil & Gas Journal. All Rights Reserved.