INDUSTRY BRIEFS

Spills

An oil tanker accident off the Egyptian port of Suez caused the spill of 2,000 metric tons of diesel oil and sank part of Suez Petroleum Products' terminal in the Red Sea. The Liberian-registered Temryuk tanker struck the terminal during a storm Jan. 12, sinking a jetty and pipeline linking the terminal to an onshore tank farm west of the port.

U.A.E.
closed a desalination plant in Ajman Jan. 8, as a 40-mile long oil slick threatened the coasts of Dubai, Sharjah, Ajman, and Umm al-Qaiwain a day after a U.A.E.-flagged barge sank 5 miles off Ajman in the Persian Gulf. The barge, lying at a depth of 20 m, has 30 tanks and spilled about 4,000 tons of oil.

Pipelines

MCN Energy Group Inc., Detroit, agreed to increase its interest to 20% from 17.5% in IPL Energy Inc.'s $470 million Vector Pipeline project. Vector can transport 1 bcfd of gas from the Chicago area through Michigan to the Dawn, Ont., gas hub. Also, MCN's Michigan Consolidated Gas Co. subsidiary will lease under a long-term contract a 59-mile section of its transmission system to Vector. The 343-mile pipeline, two 30,000 hp compressor stations, and five metering/regulating stations will be completed by November 1999.

TransCanada PipeLines Ltd.,
Calgary, let a $14 million pipeline construction contract in northwestern Ontario to Ocelot Energy Inc. unit O.J. Pipelines, Calgary. The project requires O.J. to replace and lower 30-in. and 36-in. pipe and various main-line valves, install three pig launchers, and hydrostatically retest two valve sections.

Power

Houston Industries Inc. and San Diego-based Enova Corp., in a joint venture, will construct and operate a $280 million, 480-MW power plant at Boulder City, Nev. A large-scale merchant electric power generating plant, El Dorado Energy will be on line by third quarter 1999.

Coastal Power Co.,
a unit of Coastal Corp., said that construction of the largest diesel-fueled power generation plant in Nicaragua will begin during the first quarter, with start-up early in 2000. Coastal Power and its Nicaraguan partners will build, own, and operate the 50-MW plant at Tipitapa, near Managua, and a Coastal affiliate will supply diesel for it. Coastal Power last month was awarded a 15-year power purchase contract with Nicaraguan utility ENEL.

Cogeneration

Occidental Energy Ventures Corp., an Occidental Petroleum Corp. subsidiary, and Conoco Global Power Inc., a wholly owned unit of Conoco Inc., completed the $210 million financing of a jointly developed 440-MW natural gas-fired cogeneration power plant near Ingleside, Tex. Ingleside Cogeneration LP will own and operate the plant. Construction is to start early in 1998.

Coalbed methane

Texaco Inc. signed a contract with China United Coalbed Methane Corp. Ltd. to conduct a coalbed methane (CBM) exploration program in China's Anhui province (OGJ, Jan. 12, 1998, Newsletter). The agreement includes an exploration program to be carried out over two blocks totaling 2,663 sq km in the Huabei coal mining area in northern Anhui province, about 600 km northwest of Shanghai. Peak CBM production from these two blocks could reach 1.5 billion cu m/year.

Drilling-production

Chapparal Resources Inc., Houston, reported start-up of production from Karakuduk oil field in Kazakhstan. Karakuduk Munay Inc. (KKM), Chapparal's joint venture with state-owned Kazakh Oil, started flow from Well 21 in the 127 million bbl-reserve Karakuduk field at a rate of 526 b/d. KKM said five deeper pay zones also tested commercial quantities. The workover rig will move to Well 7 for reentry and completion; it is the second scheduled recompletion in the company's Phase I program, to be concluded in the first quarter. At that time, KKM plans to be producing 3,000 b/d. Phase II, a 10-well drilling program, follows in the second quarter.

Hurricane Hydrocarbons Ltd.,
Calgary, reported three wells are in production in its South Kumkol field in Kazakhstan with production of more than 5,000 b/d. Four wells are being tied in at South Kumkol, and additional delineation wells are planned as part of a $169 million program. The company expects production to average 72,600 b/d in 1998.

Parallel Petroleum Corp.'s,
Midland, Tex., natural gas discovery well in the Yegua/Frio/Wilcox gas trend in Victoria County, Tex., had an open flow potential of 90.8 MMcfd at a depth of 6,800 ft. Initial gross production is 1 MMcfd. Six exploratory wells were drilled on the 18,000-acre Keeran Ranch prospect, of which four are productive; additional locations are planned in 1998. During 1997, Parallel drilled 23 wells in the trend, of which 10 were completed, 6 are awaiting completion, and 7 are dry holes. Parallel owns a 19.3% working interest in the wells.

Terminals

Indian Oil Corp. (IOC) plans to build a $21.5 million, 60,000 kl capacity oil terminal with ancillary facilities at Jawaharlal Nehru Port Trust. The port trust has allocated IOC about 25 acres for the terminal site.

Petrochemicals

Borealis AB, Copenhagen, let a $200 million contract to Foster Wheeler Corp.'s Paris-based unit to expand its ethylene plant at Stenungsund, Sweden, to 600,000 metric tons/year of ethylene from 400,000 tons/year. Completion is slated for late in 1999. Stone & Webster Engineering Corp. will provide technology and basic design, based on its advanced recovery system and USC M-coil furnace technology. Foster Wheeler France will be responsible for project engineering, including detailed design of two 100,000 ton/year ethylene heaters and related hot section, as well as provide related equipment and materials and construction management.

Qatar General Petroleum Corp.
will let $880 million in engineering and construction contracts in March for three of its natural gas-fed joint venture projects. The $500 million gas-to-liquids (GTL) project at Ras Laffan industrial city (OGJ, July 21, 1997, Newsletter), Qatar Vinyl Co. petrochemical plant, and Qatar Hot Briquette Iron Co. plant will go on stream by 2000. Plans for the GTL plant will be finalized early this year.

Companies

Tejas Gas Corp. shareholders approved Shell Oil Co.'s $1.45 billion acquisition of Tejas. The official close of the transaction was effective Jan. 12. In the agreement, Shell offered to acquire all outstanding common stock of Tejas for $61.50/share in cash and assume balance sheet debt and preferred stock of about $1.18 billion. Shell's natural gas midstream business will be combined with Tejas. The new company will operate under the Tejas name as an affiliate of Shell Oil.

Arakis Energy Corp.,
Calgary, disclosed $1.2 billion in construction contracts for an export pipeline and facilities for its concession in south central Sudan. Concession and pipeline interests are operator Arakis 25% and partners China National Petroleum Co. 40%, Petronas Carigali Overseas Sdn. Bhd. 30%, and Sudapet Ltd. 5%. Contracts were awarded to: China Petroleum Engineering Construction Corp., for field facilities and 70% of line pipe supply; German firm Mannesmann Handel, 30% of line pipe supply; Argentina's Techint International Construction Corp., marine terminal, pumps, and Scada system; Scotland's Weir Pumps Ltd., pumps and drivers; and England's Allan Power Engineering Ltd., generators.

Forest Oil Corp.
agreed to purchase 13 Louisiana onshore oil and gas fields from an undisclosed private company for $231 million-$216.7 million in cash and 1 million shares of Forest stock. The properties have estimated proved reserves of 110 bcf of natural gas and 12.7 million bbl oil, or 186 bcf equivalent. The purchase includes 54 producing wells with an average working interest of 88%. Forest will become operator of 12 of the 13 fields. The net 1998 production from the fields is estimated at 55 MMcfd equivalent.

Taurus Exploration Inc.,
Birmingham, Ala., a unit of Energen Corp, acquired Chateau Oil & Gas Inc.'s Gulf of Mexico West Cameron Blocks 426 and 427 for $17 million. The properties have an estimated 12.5 bcf of natural gas reserves. About 45% of these short-lived proved reserves are producing. The company will spend an additional $800,000 in the next 3 years to produce 55% of behind-pipe reserves. Net production from the properties is 7.1 MMcfd. Taurus will sell 20% of its share to an unnamed third party who will become operator.

Canadian Occidental Petroleum Ltd.,
Calgary, agreed to acquire a 50% interest in operator BHP Petroleum Pty. Ltd's. Block WA-260-P in the Bonaparte basin off Northwest Australia. Several oil discoveries were made recently on the block, including Buffalo field in 1996. The first of six planned exploratory wells was spudded in late December. Canoxy also will participate in development of Buffalo field.

Gas marketing

Shell U.K. Ltd. merged its North Sea gas marketing companies, Quadrant and Gas-Direct, into Shell Gas Direct Ltd. The new unit will continue to serve Shell's customers in U.K. industrial and commercial gas markets, as well as expand market share. Shell claims the merger strategically follows its purchase of Esso Exploration & Production U.K. Ltd.'s 50% share of Quadrant and Gas-Direct in May 1997. Shell and Esso set up Quadrant in 1989 to take advantage of the U.K.'s liberalization of its gas supply market.

Gas processing

Viet Nam's state-owned Petrovietnam let a turnkey contract to Japan's NKK Corp. and South Korea's Samsung Engineering to build a natural gas processing plant at Vung Tau, 80 km southeast of Ho Chi Minh City. Construction and delivery of the 150 MMcfd gas plant will take 18 months. The plant will receive a natural gas stream from Bach Ho field in the South China Sea and recover propane, butane, and condensate.

Syntroleum Corp.
and units of ABB Asea Brown Boveri signed a broad technical cooperation and development agreement. Under the agreement, ABB operating units ABB Power Generation Ltd., Baden, Switzerland, and ABB STAL AB, Finspong, Sweden, will integrate various existing ABB gas turbines for use in Syntroleum's proprietary technology that converts natural gas into synthetic crude oil. ABB will also market the Syntroleum process for the coproduction of electric power and synthetic fuels from natural gas.

Exploration

ARCO British Ltd. found gas with its 14/26a-6 well in the central U.K. North Sea. Operator ARCO said the well flowed at 40 MMcfd of gas with flowing tubing pressure of 1,800 psi. Flow rates were limited by surface facilities. ARCO plans an appraisal well in 1998. ARCO has a 75% interest and Calgary-based Talisman North Sea Ltd. has a 25% interest in the field. The 14/26a license is next to Talisman's 13/30a block, which contains the Cromarty gas discovery.

Conoco Inc.
and France's Geopetrol are reported close to signing a joint venture exploration agreement with Petrovietnam for offshore Block 15-1 off the coast of Vung Tau, Viet Nam. The block is next to the Phuong Dong and Lang Dong oil fields operated by Mitsubishi Corp. subsidiary JVPC.

TomskNeftegas,
a unit of Russian-based Eastern Oil Co., let an $8.4 million contract to GeoQuest, a unit of Schlumberger, to deliver data management software and exploration optimization services. The 2-year contract, funded by the World Bank, calls for GeoQuest to provide data management software, hardware, and training to set up two fully synchronized databases linking the western Siberia sites of Tomsk and Strezhevoy. A production data management system is included to handle data from 16 fields in the area.

U.S. Bureau of Land Management
will hold a hearing Jan. 28 in San Francisco to accept comments on the draft activity plan/environmental impact statement covering proposed leasing in the northeastern corner of the National Petroleum Reserve-Alaska. Another hearing is scheduled Jan. 26 in Washington, D.C.

Seven Seas Petroleum Inc.,
Houston, obtained two association contracts from Colombian state oil company Empresa Colombiana de Petroleos SA covering blocks in the Middle Magdalena basin of north-central Colombia. The Rosablanca contract contains 317,000 acres and the Montecristo contract 375,000 acres in the Cesar, Bolivar, and Santander departments. The first and second years of each contract term require reprocessing and shooting of 2D seismic and contain an option to drill one well in the third year.

Refining

Itochu Corp., Tokyo, after receiving government guarantees later this month, will sign a $300 million contract with Georgia to build a 60,000 b/d refinery at Supsa on the Black Sea by 2001, claims the former Soviet republic's International Oil Corp. The refinery will produce fuel oil for electric power stations and diesel, gasoline, and petrochemicals for the Georgian market and for export.

LNG

Enron International, a unit of Enron Corp., agreed to a joint venture with Japan's Mitsubishi Corp. to bid for a proposed $2.5 billion, 2,000 MW LNG-fired power project at Ennore in the state of Tamil Nadu, India. Enron will import 10 million tons/year of LNG from Qatar for the power plant.

Copyright 1997 Oil & Gas Journal. All Rights Reserved.