INDUSTRY BRIEFS

Refining

Merey Sweeny LP, a joint venture of Phillips Petroleum Co. and Petr?leos de Venezuela SA, let contract to Bechtel Corp. for engineering, procurement, and construction of a 110,000 b/d vacuum distillation unit and a 58,000 b/d delayed coker, to be built at Phillips's Sweeny complex at Old Ocean, Tex. The new units are part of a joint venture formed to upgrade the refinery to process extra-heavy Venezuelan crude (OGJ, Nov. 16, 1998, p. 46). Completion is slated for August 2000.

Alternate fuels

The state of Illinois and Pure Energy Corp., New York, will test an ethanol-diesel fuel blend called OxyDiesel in a fleet of unmodified diesel trucks at an Archer Daniels Midland facility in Decatur, Ill. The fuel, developed by Pure Energy, is expected to reduce emissions.

Drilling-production

A deck for the Petronius platform slipped into the Gulf of Mexico as it was being installed Dec. 3 by J. Ray McDermott SA's DB50 barge. Petronius, a deepwater compliant tower platform in 1,754 ft of water on Viosca Knoll 786, is jointly owned by operator Texaco Inc. and Marathon Oil Co. The platform's 3,605-ton south module contains production equipment, waterflood facilities, and crew quarters. It broke from its support, struck a transport barge and the DB50, and fell into the gulf. The north module had been successfully placed earlier that day. The accident will pose indefinite delays to production, originally slated for mid-1999.

Participants in the
Bellevue 1 well, which blew out Nov. 23 (OGJ, Nov. 30, 1998, p. 34), are drilling a relief well, Bellevue 1R. The partners plan to install a diverter assembly to carry hydrocarbons to two burn pits. Bellevue 1R is being drilled 1,500 ft from the original well and will intercept it at 13,500-14,000 ft. Participant PYR Energy Corp., Denver, said it will take about 45 days to steer the new well to the existing well bore.

Hungary's MOL Rt.
announced first oil from Sabria West field in Tunisia's Kebi* block and put a new discovery on production test. The operator said Sabria West-1 was brought into production at a rate of 600 b/d. MOL also reported a discovery made while deepening its Sabria North West-1 well on the same block. This well was completed with a horizontal section and is currently producing 1,200 b/d of oil and 70,000 cu m/day of gas on extended production test.

Statoil AS
submitted a plan for development and operation of Sygna oil field in the Norwegian North Sea to the Ministry of Petroleum and Energy. Sygna straddles Blocks 33/9 and 34/7 and lies 21 km northeast of Statfjord field. Statoil plans to develop Sygna with two production wells tied back to a production template, which would be linked to Statfjord C platform. An extended-reach well would be drilled from the Statfjord North satellite field to enable water injection in Sygna. Development is expected to cost 1.4 billion kroner; first oil is slated for Aug. 1, 2000.

Cerro Negro,
a joint venture of Mobil Corp., Petroleos de Venezuela SA, and Veba Oel AG, let a 5-year, $20 million contract Weatherford International Inc., Houston, to provide artificial lift system products and services. Weatherford will provide a complete progressing-cavity pumping system and field installation and maintenance services for wells in the Orinoco Belt region of Venezuela. Work is slated to begin January 1999.

Oceaneering International Inc.,
Houston, installed a floating storage and offloading tanker (FSO) in Zafiro field off Equatorial Guinea. The FSO is moored in tandem with the floating production, storage, and offloading vessel, Zafiro Producer. The field is operated by Mobil Corp.

Burlington Resources Inc.
unit Burlington Resources Irish Sea Ltd. let a $25 million subsea contract to Stolt Comex Seaway SA for development of the Dalton project in the Irish Sea. The work includes tying back the Dalton subsea wells to North Morecambe platform by 6.9-km rigid flow lines and well control umbilicals. Work will take place in 100 ft of water and is slated to begin this month.

Exploration

BG plc made a natural gas discovery on Blocks E and 5a in the East Coast Marine license area off Trinidad, where it is operator and equal interest holder with Texaco Inc. Starfish 1X new pool wildcat was drilled in 427 ft of water and cut 501 ft of net gas pay in four zones. The well is 7.5 miles northwest of BG's Dolphin field (see map, OGJ, Apr. 14, 1997, p. 24). On test and intentionally constrained, the well flowed at a rate of 16.2 MMcfd through a 32/64-in. choke from the upper zone.

Repsol SA
and partners announced a gas-condensate discovery on the Khalda Offset concession in Egypt's western desert. On test, Nakhaw flowed 732 b/d of 53.9° gravity condensate and 19.1 MMcfd of gas. Khalda partners include operator Repsol 50%; Apache Corp., Houston, 40%; and Novus Petroleum Ltd., Sydney, 10%. The adjacent Khalda concession is currently producing 35,000 b/d of oil. Gas from Khalda Offset is expected to begin flowing next year.

Tri-Link Resources Ltd.,
Calgary, reports finding five significant oil pools in the Red River play on its Hazelwood property in southeastern Saskatchewan. Tri-Link plans to spend $65 million (Canadian) by next spring to develop the play, where well depths are up to 7,875 ft. Tri-Link estimates there are close to 100 million bbl of oil in place, 25% of which is recoverable. Tri-Link shot 770 miles of 3D seismic in the area this year and currently produces 1,500 b/d of oil. The company now has three development rigs drilling in the play.

Union Pacific Resources,
Fort Worth, made a gas discovery with the Eller Unit 1 well in Giddings field in Austin County, Tex. (see map, OGJ, Apr. 7, 1997, p. 34). The well was completed and is producing at a rate of 30 MMcfd from the Austin Chalk through a 28/64-in. choke with flowing tubing pressure of 8,150 psi. Production is currently cutailed by pipeline constraints, said Nuevo Energy Co., a 12.5% interest owner in the well. Operator Union Pacific Resources holds a 47.5% interest.

Power

Saudi Arabia's Saudi Consolidated Electricity Co. let an $835 million turnkey contract to Asea Brown Boveri Ltd., London, for the construction of a 1,100-MW oil-fired power plant at Shoaiba, Saudi Arabia, 120 km south of Jeddah on the Red Sea coast. The plant will comprise three 370-MW units, the first of which is slated for completion by mid-2001. The other two units are due in operation 8 and 14 months, respectively, after the first.

U.K. electricity utility
Eastern Group plc, Ipswich, received Department of Trade and Industry approval to build a 215-MW combined heat and power plant at Deeside, North Wales. The £100 million plant will supply electricity and steam to Shotton Paper Co. Construction is slated to begin in early 1999, and plant start-up is anticipated in early 2001. Any surplus electricity from the plant will be delivered to the national grid.

Companies

Elf Aquitaine's pharmaceutical unit, Sanofi, in which it held a 54% stake, merged with Synth?labo, the pharmaceutical unit of L'Or?al, through an exchange of shares on the basis of 13 Sanofi shares for 10 of Synth?labo. The new French firm will have estimated annual sales of 35 billion francs. Elf Aquitaine will hold 35.1% of the new firm and L'Or?al 19.1%. The companies have agreed to sign a 6-year pact, under which each will be required to maintain a minimum 20% stake in the group. Earlier press reports had pegged DuPont Co. as interested in acquiring Elf's stake in Sanofi in exchange for Conoco Inc. (OGJ, Sept. 14, 1998, Newsletter).

Unocal Corp.'s
Lower 48 exploration and production unit, Spirit Energy 76, Sugar Land, Tex., plans to sell virtually all of its oil and gas assets in Oklahoma to Magnum Hunter Production Inc., Irving, Tex., for about $36 million. Included in the properties is 115,300 net leasehold acres, which produce about 16.2 MMcfed, and some land in the Texas panhandle. The sale is expected to close by yearend. Spirit Energy is selling the assets to concentrate on its primary exploration and production activities in Texas, in the Gulf Coast region, and in the Gulf of Mexico.

North Central Oil Corp.,
Houston, acquired natural gas assets in Webb and Zapata counties, Tex., from Conoco Inc. for $73 million. The properties cover about 8,000 net acres and include Hundido and Vaquillas Ranch/Mujeres Creek fields. North Central will operate the assets' 58 wells, which have production of about 22 MMcfed.

Shareholders
of Noranda Inc., Toronto, voted in favor of a restructuring plan that would spin-off wholly owned Canadian Hunter Exploration Ltd., Calgary, and Noranda's forestry interests. Canadian Hunter production is about 90% natural gas and NGL. In first half 1998, it produced about 270 MMcfd of gas and 8,400 b/d of oil and NGL in western Canada. Shares in Canadian Hunter will be listed on the Toronto Stock Exchange by Jan. 4. The company said it wants to acquire natural gas infrastructure to complement its existing operations and facilities.

Pipelines

Canada gave final approval to the $4 billion (Canadian) Alliance pipeline project to move natural gas and liquids from Western Canada to the Chicago market. The project was opposed by environmentalists, who may launch a court challenge of Canada's National Energy Board (NEB) approval (OGJ, Dec. 7, 1998, p. 46). Major petrochemical producers in Alberta want assurances that there will be adequate ethane supplies for their plants when Alliance begins exporting liquids. NEB believes supplies will be adequate.

Enbridge Inc.,
Calgary, announced the $471 million Vector Pipeline system will begin natural gas shipments to the Chicago area by October 2000. Construction of the 344-mile line to Chicago from Dawn, Ont., near Sarnia, will be completed in mid-2000. The line would have capacity of 1 bcfd into Chicago and would interconnect with the Alliance pipeline project from Western Canada and an extension of the Northern Border Pipeline system. Final regulatory approvals are expected by April.

An explosion was reported
on the Urengoi-Pomary-Uzhgorod high-pressure gas pipeline in the Nizhny Novgorod region of Ukraine, 1.5 km from Sinyakovka (see map, OGJ, Nov. 23, 1998, p. 69). Immediately following the blast, fire fighters arrived on scene to extinguish the 35-40 m high blaze. Emergency shutoff valves were triggered. Almost 25 m of the pipeline was blown out, according to an emergency crew at the scene. About 100 m of pipe will need to be replaced. The cause of the explosion is not yet known.

A pipeline rupture
was reported by Williams on the Rocky Mountain portion of its MidAmerican NGL pipeline. Work crews in the Moab area were performing looping work on the 412-mile portion of line from Bloomfield, N.M., to Daggett County, Utah. Williams said four people sustained minor injuries. Upon discovery of the rupture, a 10-mile portion of the line was isolated and the remaining NGL was burned off. The line has been repaired and placed back in service. At presstime, Williams was uncertain about when looping could resume, and the cause of the rupture remains under investigation.

Florida Gas Transmission Co.,
Houston, filed for an application with the Federal Energy Regulatory Commission to build 205 miles of pipeline and add 48,570 hp of compression, expanding its existing 5,000-mile system in Florida. The proposed expansion is estimated to cost $350 million and will provide about 272 MMcfd of incremental firm transportation gas service. Already, eight shippers signed 20-year commitments for the new gas.

TransCanada PipeLines Ltd.,
Calgary, and state-owned Petroleum Authority of Thailand (PTT) plan to build two products pipelines in Thailand for $400 million. The lines will connect with a 140-mile line owned by Thai Refined Products Pipeline Co., of which TransCanada owns 2.5%. If approved, the extensions will be owned 51% by PTT and 49% by Trans- Canada. One will move 50,000 b/d of oil from the Bangkok area 317 miles northeast to Khon Kuen. The other will transport 50,000 b/d from Bangkok 230 miles northwest to Chaing Mai. TransCanada expects to receive Thailand's approval in first quarter.

NEB approved
plans by TransCanada PipeLines for a $402.9 million (Canadian) expansion of its natural gas pipeline system in Sas- katchewan, Manitoba, and Ontario. The project includes 97 miles of looping, four new 28.3-MW compressor units, and related facilities. The expansion is slated to come on line by Nov. 1, 1999.

BC Gas Inc.,
Vancouver, B.C., said it will reapply for approval from the British Columbia Utilities Commission to construct a $350 million (Canadian) natural gas pipeline across southern British Columbia (OGJ, July 7, 1997, p. 26). The commission turned down BC Gas's first application last April over concerns about BC making a large capital investment to serve seasonal demand. BC signed an agreement with BC Hydro to contract for firm capacity on the proposed 186-mile Southern Crossing pipeline.

Interconnector U.K. Ltd.
let a £10 million, 5-year contract to Kvaerner Oil & Gas Ltd., London, for operational support on the Interconnector pipeline system, which transports U.K. gas to Europe via Belgium (OGJ, Oct. 12, 1998, p. 41). The work will involve operations support, maintenance management, and engineering integrity management for the pipeline, the gas compression plant at Bacton, U.K., and the gas receiving terminal at Zeebrugge, Belgium.

Terminals

Williams plans to purchase 12 petroleum products terminals, mainly in the southeastern U.S., from Amoco Corp. for an undisclosed price. The terminals have 2 million bbl of storage capacity. Amoco said the sale relates directly to its planned merger with British Petroleum Co. plc.