INDUSTRY BRIEFS

Gas distribution

Gas Authority of India Ltd. (GAIL) and Bharat Petroleum Corp. Ltd. (BPCL) are planning a joint venture to implement a 5.37 billion rupee natural gas distribution project in Delhi. GAIL will have a 22.3% interest in the project and BPCL 22.5%. Indian investors and financial institutions will acquire the remaining interests. The Delhi government will be offered a 5% stake. The project will supply fuel to 231,000 households, plus commercial facilities and vehicles.

Project financing

Mobil Corp. and Petroleos de Venezuela SA (Pdvsa) affiliates, Mobil Cerro Negro Ltd. and Pdvsa Cerro Negro SA, successfully completed a $900 million limited recourse financing for the Cerro Negro heavy oil project in Venezuela. The project is a joint venture (JV) of affiliates of Mobil, Pdvsa, and Veba Oel AG (OGJ, Nov. 3, 1997, Newsletter). The total cost of the upstream portion of the project and the heavy oil upgrader will be $1.9 billion. Mobil and Pdvsa's share of production will be moved to a refinery at Chalmette, La., jointly owned by Mobil and Pdvsa.

Drilling-production

The Cerro Negro JV of Mobil and Pdvsa let a $150 million turnkey contract to a joint venture of Parsons Energy & Chemicals Group Inc., Pasadena, Calif., and Inelectra to conduct engineering, procurement, and construction of the Cerro Negro upstream facilities. The Parsons/Inelectra project includes well pads, a gathering system, a central production facility, power transmission and distribution lines, pipelines, an injection system, and supporting infrastructure. The project is scheduled for completion in 1999.

Chevron Corp.
and its Project Genesis partners are positioning the 28,700-ton hull of the Genesis drilling and production platform in 2,600 ft of water in the Gulf of Mexico, 150 miles south of New Orleans (OGJ, May 4, 1998, p. 76). Project teams from Chevron U.S.A. Production Co., Exxon Co. U.S.A., PetroFina Delaware Inc., and contractors uprighted the 705-ft cylindrical steel hull that will serve as the foundation for the platform. Production is expected to begin late this year at an initial rate of 12,000 b/d of oil and reach 55,000 b/d of oil and 72 MMcfd of natural gas by 2000.

Heavy oil

Sincor, a joint venture of Pdvsa, Total Venezuela, and Statoil Venezuela AS, selected the Sydec delayed-coking technology of Foster Wheeler USA Corp., Clinton, N.J., for its heavy crude oil upgrader project in Jose, Venezuela. The award is the second of a number of Venezuelan extra-heavy oil joint venture projects for which the Sydec process will be used (OGJ, Apr. 27, 1998, p. 30).

Husky Oil Ltd.,
Calgary, plans a $500 million (Canadian) expansion of its heavy oil upgrader at Lloydminster, Alta. The expansion will increase capacity of the $1.2 billion plant to 150,000 b/d from 69,000 b/d. Construction will begin in the second half of 1999, with completion slated for 2001. Husky bought a 50% interest in the upgrader in February from the Saskatchewan government for $350 million and now owns the upgrader outright. The Alberta and federal governments quit the project following several years of losses after it came on stream in 1992. It has been profitable for the past 2 years.

Oilsands

Syncrude Canada Ltd. approved $900 million (Canadian) in funding to develop the Aurora oilsands mine in northern Alberta. The mine, slated to start up in 2000, is expected to produce 38,300 b/d. Aurora is part of Syncrude's $6 billion expansion program to increase production of synthetic crude from oilsands to 424,700 b/d by 2007.

Exploration

LL&E Algeria Ltd., Sonatrach, and Talisman Energy Inc. reported that the MLSE-1 well, in Algeria's Berkine basin on Menzel Lejmat Block 405, flowed 14,638 b/d of oil and 107 MMcfd of natural gas from four intervals on test. The well, drilled to 14,459 ft, cut 190 ft of net pay. The Triassic Tag flowed 11,278 b/d of 45.4° gravity oil and 21 MMcfd of gas; Carboniferous Visean RKF sandstone flowed 2,675 b/d of 53.2° gravity oil and 38 MMcfd of gas. The well also tested two Devonian sections: Strunian F1/F2 sands and Emsian F4 sands.

EEX Corp.
completed sidetrack drilling on Llano prospect on Garden Banks Block 386 in the Gulf of Mexico. The exploration well cut 200 ft of hydrocarbon-bearing sands in Pliocene and Miocene sediments. The zones are equivalent to those from which Shell Oil Co.'s Auger field is producing. Operator EEX said the well was drilled to a record depth for the gulf, 27,864 ft. An appraisal well is planned later this year. Partners are Enterprise Oil Gulf of Mexico Inc., a unit of Enterprise Oil plc, 30%; PanCanadian Gulf of Mexico Inc., a unit of PanCanadian Petroleum Ltd., 20%; and Mobil Exploration & Producing U.S. 20%.

State Oil Co. of the Azerbaijan Republic
(Socar) awarded a production-sharing agreement (PSA) to Frontera Resources, Houston, for onshore Kursenge-Karabagh block. The PSA is Azerbaijan's first onshore rehabilitation, development, and exploration project. Frontera must perform extensive rehabilitation and development work in two producing oil fields-Kursenge and Kara- bagh-acquire seismic data, and drill at least three exploration wells. The two fields produce a combined 3,500 b/d of light, sweet oil. Socar holds a 50% interest, Frontera 30%, and a combine of Amerada Hess Corp. and Saudi Arabia's Delta Oil 20%.

Petronas Carigali Sdn. Bhd.
and Petrovietnam Oil & Gas Corp. signed a pre-unitization agreement (PUA) covering the eastern flank of Kekwa oil and gas field. The field lies on Block PM-3 in the commercial arrangement area (CAA) between Malaysia and Viet Nam in the South China Sea and extends into Viet Nam's Block 46. The PUA enables the parties to devise a development plan that includes the Viet Nam extension. Interests in Block PM-3 CAA are: Petronas Carigali 46.06%; Lundin Oil AB, Vancouver, B.C., 41.44%; and Petrovietnam 12.5%.

Centurion Energy International Inc.,
Calgary, and Marathon Petroleum El Manzala Ltd., a unit of Marathon International Oil Co., reported Abu Monkar No. 1 discovery in Egypt flowed on test 21.6 MMcfd of gas through a 56/64-in. choke with 1,342 psi wellhead pressure. The well, in the southern area of the El Manzala concession, cut 10 m of net pay at 4,200 ft. Centurion holds a 40% interest, Marathon 60%. The partners plan to acquire additional seismic over Abu Monkar field to pinpoint sites for two more wells: a second well on El Wastani, following a recent recompletion of the first well there, and an exploration well on East El Wastani.

Vaalco Gabon (Etame) Inc.,
a unit of Vaalco Energy Inc., reported its Etame No. 1 well off southern Gabon flowed on test 3,500 b/d of medium-light oil through a 36/64-in. choke. Interest holders are operator Vaalco 17.85%, Western Atlas Afrique Ltd. 65%, Sasol Petroleum International Pty. Ltd. 10%, Petrofields Exploration & Development Co. 4.525%, and Alcorn Petroleum & Minerals Corp. 2.625%.

Gulf Canada Resources Ltd.,
Denver, through its wholly owned subsidiary Clyde Petroleum Exploratie BV, reported the Q4-8 exploration well in the Dutch North Sea on test flowed 27 MMcfd of gas. Gulf Canada said a production license application will be filed later this year, and it proposes to start production by yearend 1999. Partners in Q-4 Block are Gulf Canada 49.75%, Dyas BV 17.25%, and Clam Petroleum BV (a 50-50 joint venture of Marathon Petroleum Netherlands Ltd. and Burlington Resources Netherlands Inc.) 33%. The state has an option to acquire a 40% interest through Energie Beheer Nederland BV.

Refining

Praxair Inc., Danbury, Conn., signed a $200 million long-term contract to supply hydrogen to Conoco Inc.'s refinery in Lake Charles, La., and will expand its Gulf Coast hydrogen pipeline capacity by 20%. Conoco will use the hydrogen to make clean-burning fuels. Praxair delivers back-up hydrogen to Conoco's Lake Charles refinery. Praxair also will build and operate a hydrogen purification unit at a PPG Industries Inc. plant in Lake Charles, La. When completed early in 1999, the plant will purify and compress hydrogen by-product from PPG's chlor-alkali production process for delivery to Praxair's pipeline.

Hellenic Petroleum SA
and Motor Oil Hellas (MOH) awarded Institut Fran?ais du P?trole (IFP) all contracts to adapt Greek refining capacity to produce fuels that meet European sulfur and benzene specifications. As process licensor for MOH's conventional catalytic reformer, IFP will convert it to a continuous catalyst regeneration reformer. IFP also will remodel Hellenic Petroleum's mild hydrocracking/hydrodesulfurization unit upstream of the fluid catalytic cracker (FCC). Unit capacity will increase 50% and the cracking severity will be adapted to produce low-sulfur FCC gasoline.

A fire in the HF alkylation unit
at Pdvsa's Puerto la Cruz refinery in eastern Venezuela was extinguished with no reported injuries, according to the refinery's general manager Marcos Camperos. The fire began during start-up after the plant had been shut down for maintenance. No other units at the refinery were affected. The cause of the fire is under investigation.

Imperial Petroleum Recovery Corp.,
Houston, has a 30-day agreement with Shell Oil Corp. to operate its microwave sludge technology (MST) system at Shell's Martinez refinery near San Francisco. The MST system provides environmental benefits by breaking oil emulsions without using chemicals and is less expensive than competing systems, IPRC claims (OGJ, Dec. 2, 1996, p. 66).

Petrochemicals

U.S. Environmental Protection Agency and the Occupational Safety and Health Administration's investigation of an explosion and fire at the Shell Chemical Co. plant in Deer Park, Tex., on June 22, 1997, found that check valves in a gas compression system were inadequate and mechanical integrity had not been confirmed (OGJ, June 30, 1997, Newsletter).

Mobil Chemical Co.
and Petroquimica de Venezuela SA awarded basic engineering services for their proposed olefins complex at Jose, Venezuela (OGJ, Oct. 14, 1996, p. 34), to a combine headed by Fluor Daniel Inc., a unit of Fluor Corp. Fluor Daniel's contract for Phase 1 of the project is worth $27 million. Fluor's partners, Tecnofluor and Snamprogetti SpA, will provide front-end engineering and design services. Flour Daniel will produce engineering packages that will be used as a transition into Phase 2, plus provide detailed design, procurement, and construction services. Phase 1 is scheduled for completion within 12 months.

Gas processing

Shell Middle Distillate
Synthesis (Malaysia) Sdn. Bhd. will reconstruct damaged parts of its natural gas-to-liquids complex in Bintulu, Sara- wak (OGJ, Jan. 12, 1998, p. 22), subject to arrangements for long-term gas supply and various approvals from government authorities. Restoration work will commence at the end of June on an air separation unit. Production is expected to resume in early 2000.

Pipelines

Canada's National Energy Board received an application from Maritimes & Northeast Pipeline Ltd. Partnership (M&NE) to lay natural gas pipeline laterals to Halifax, N.S., and Saint John, N.B. M&NE is building a natural gas pipeline to move Sable Island gas to markets in Atlantic Canada and the U.S. Northeast. The Halifax lateral will be 75 miles of 12-in. line from a main line near Stellarton, N.S., to a power generating station at Tufts Cove. Estimated cost of the lateral is $74 million, and volume would be 60 MMcfd. The St. John lateral will be 63 miles of 16-in. line from an M&NE main line to St. John at a cost of $91 million; capacity will be 130.6 MMcfd. The project also includes 5 miles of 5-in. line. Both laterals will be in service Nov. 1, 1999.

Kinder Morgan Energy Partners LP
will pay more than $100 million for a 24% stock purchase interest in Plantation Pipe Line Co., a unit of Shell Pipe Line Corp. The sale is subject to U.S. Federal Trade Commission approval and rights of first refusal held by Plantation's other shareholders-affiliates of Exxon Corp. and Chevron Corp. Plantation Pipe Line owns and operates a 3,100-mile, common carrier products pipeline system across the southeastern U.S.

Duke Energy International LLC
(DEI), a unit of Duke Energy Corp., Charlotte, N.C., purchased the Australian energy holdings of PG&E Corp., San Francisco. DEI submitted the winning bid for assets in southeastern Queensland, including a 627-km pipeline and trading and marketing operations. The Queensland pipeline was completed in 1989 by the Queensland government and bought in 1996 by PG&E Corp. The pipeline will continue to be operated out of Brisbane.

Companies

Regulatory opposition killed the refining and marketing merger planned by Petro-Canada Ltd. and Ultramar Diamond Sharmrock Corp. (OGJ, June 15, 1998, p. 37). The companies withdrew an application to Ottawa's Competition Bureau. The firms said it was apparent a review process would be lengthy, expensive, and risky.

Poco Petroleums Ltd.,
Calgary, launched a $127.7 million (Canadian) takeover bid of Canrise Resources Ltd., Calgary. The deal will give Poco lands and production contiguous to its operations in west-central Alberta. Canrise has production of about 4,200 boed. Poco production averaged 91,000 boed in the first quarter.

Petroleum Geo-Services ASA
(PGS) will acquire U.K.-based Atlantic Power Group and U.S. firm Acadian Geophysical Services Inc. Atlantic Power, a production management and floating production specialist, has interests in the U.K., Indonesia, Qatar, Singapore, and Venezuela. This merger, valued at £62 million, is expected to result in PGS issuing new shares for all Atlantic Power stock; it will be accounted for as a pooling of interests. The combine with Acadian, a provider of 3D seismic acquisition services in transition zone areas, is valued at $35 million. PGS will issue new shares for all outstanding shares of Acadian.

Copyright 1998 Oil & Gas Journal. All Rights Reserved.