INDUSTRY BRIEFS

Spills

An oil tanker en route to Mumbai (formerly Bombay) from Bahrain was sinking about 190 nautical miles southwest of Karachi at presstime and spilling its cargo of 5,000 metric tons of furnace oil. The 20-mile wide spill was drifting toward the coast, causing Pakistani officials to be concerned about damage to fisheries. Some officials said high temperatures in the area would evaporate the oil rapidly, leaving the residue to settle in the sea.

About 800 bbl
of oil was spilled from Agip SpA's Tebidabu-Brass pipeline in Nigeria. The cause was determined to be removal of a plug on a 1/4-in. fitting mounted on a river crossing valve. The pipeline transports crude from the Ogbainbiri, Clough Creek, and Tebidabu flow stations to Agip's Brass terminal in Bayelsa state. Agip has ceased production in the area.

Gas processing

Qatar General Petroleum Corp. (QGPC) reported its condensate recovery plant at Dukhan, Qatar, is undergoing trial operations. The construction project included building a gas plant, laying pipelines from Dukhan oil field to the Mesaieed industrial area, adding storage depots, and building export facilities. The plant will process 800 MMcfd of gas from the Dukhan area and recover 40,000 b/d of condensate. The condensate will be transported through the pipeline to the Mesaieed terminal for export. Surplus gas will be reinjected into the field.

Petrochemicals

Goodyear Tire & Rubber Co., Akron, Ohio, let contract to M.W. Kellogg Co., Houston, for engineering and procurement services for a $144 million specialty polymers plant at Beaumont, Tex. Kellogg will also design and procure portions of the polyisoprene expansion, already under way at the complex. The facility is scheduled to come onstream in early 2000.

Dow Chemical Co.
let a $10 million contract to Dresser-Rand Co., Olean, N.Y., to supply compression equipment to be used at its ethylene plant at Freeport, Tex. The project requires revamping a cracked gas train, a propylene refrigeration train, and an ethylene refrigeration train. Dresser-Rand will also provide Datum axial split and Datum radial split centrifugal compressors. The equipment will be installed in 2000.

Condea Augusta SpA,
Milan, will expand linear alkylbenzene production at its Augusta, Sicily, site by 100,000 metric tons/year after installation of solid bed alkylation process units supplied by UOP LLC, Des Plaines, Ill. The new units are expected to be operational in July 2000.

Exploration

Carigali-Pttepi Operating Co. Sdn. Bhd. (CPOC), a 50-50 joint venture of Petroleum Authority of Thailand's exploration and production unit and Malaysian state firm Petronas, said its Jengka West-1 appraisal well on test flowed 7.42 MMcfd of gas and 59 b/d of condensate through a 56/64-in. choke from zones at 2,460-3,028.5 m. The well was drilled to 3,100 m TD and encountered several gas-bearing sands with net pay of 25.1 m. The well is 8 km southwest of Jengka-1 discovery well on Block B-17. Other gas fields on the CPOC-operated block are Muda, Tapi, Mali, and Amarit; Muda and Jengka are scheduled to come on stream in third quarter 2002 with an expected combined flow rate of 250 MMcfd.

BHP Petroleum Pty. Ltd.
disclosed a gas strike in Pakistan's Sindh province in the Dadu license area. Zamzama-1 wildcat was drilled to 3,938 m VD and cut a 320 m gas column, of which two intervals were tested. One interval at 3,720 m flowed 24.6 MMcfd of gas and 93 b/d of condensate through a 40/64-in. choke with flowing wellhead pressure of 2,796 psi. A second interval at around 3,640 m flowed 22 MMcfd of gas and 84 b/d of condensate through a 40/64-in. choke with flowing wellhead pressure of 2,559 psi. Further drilling and seismic acquisition are planned. License partners are: operator BHP 47.5%, Monument Resources (Pakistan) Ltd. 23.75%, Premier Exploration Pakistan Ltd. 23.75%, and Pakistan 5%.

The Terra Nova Alliance
let a $50 million (Canadian) contract to Newfoundland's Secunda Marine Services Ltd. for two offshore support vessels for development of Terra Nova oil field off Newfoundland. The vessels Trinity Sea and Burin Sea were contracted for 4 years, with options to renew. The alliance is a consortium headed by Petro-Canada Ltd., Calgary, that was formed to develop the Grand Banks oil field.

Refining

An explosion last week at Irving Oil Ltd.'s 250,000 b/d refinery at Saint John, N.B., killed one worker and injured two others. There has been no word on the blast's cause. According to local reports, two schools and some residences near the refinery were evacuated. Irving declined to say whether the explosion and subsequent fire would affect output or how long repairs might take.

TransAmerican Refining Corp.
began starting up its refinery at Norco, La. The plant has been idle since the early 1980s. The vacuum unit has been commissioned, and the crude unit and delayed coker are set to start up within a few weeks. The plant will process more than 2 million bbl of low-sulfur feedstocks and crude oil before switching to the heavier, sour feedstocks that will comprise much of the long-term feedstock slate. Initial throughput will be 100,000-125,000 b/d. The refinery is being refurbished in two phases. After completion of Phase II, which will include an MSCC fluid catalytic cracker, the refinery will process more than 230,000 b/d of heavy, sour crude oil and atmospheric tower bottoms.

Coastal Corp.
unit Coastal Eagle Point Oil Co. entered into a toll processing agreement with Statoil Marketing & Trading (US) Inc. The agreement stipulates that Statoil M&T, an affiliate of Norwegian-owned Statoil, will supply 65,000 b/d of Norwegian crude oil to the 135,000 b/d refinery at Westville, N.J. The initial term of the agreement is for 1 year.

Drilling-production

Ranger Oil Ltd. reported first oil at its U.K. North Sea Columba E field. The field was developed with a single extended-reach well drilled from Ninian Southern platform. Block 3/7 Columba E began production at 9,000 b/d. Ranger expects by yearend to decide whether to extend field development with further drilling and water injection. Columba E estimated reserves are 20 million bbl of oil, although Ranger claims significant upside potential through water injection. Field interest holders are: operator Ranger 34.06%, Agip (U.K.) Ltd. 25.7%, Oryx U.K. Energy Co. 26.04%, Deminex U.K. Oil & Gas Ltd. 8.4%, and Murphy Petroleum Ltd. 5.8%.

Unocal Indonesia Co.
reported a delineation well on the deepwater Merah Besar complex in its East Kalimantan production sharing contract (PSC) area discovered a shallow oil-bearing reservoir. Hitam Besar-3 was drilled to 7,206 ft and discovered oil in upper Miocene/Pliocene sands and natural gas in shallower Pliocene sands, similar in age to gas-bearing reservoirs discovered by earlier Merah Besar wells (OGJ, Mar. 2, 1998, p. 41). Hitam Besar-3, 1.8 miles northwest of Merah Besar-5, cut 41 ft of oil pay and 43 ft of gas pay. Unocal has a 100% working interest in the PSC. The firm intends to submit a development plan for Merah Besar in fourth quarter. Production could begin by early 2001.

Norway's
Statoil AS has joined the ranks of Danish producers with start-up of oil production in Block 5604/22a Lulita field. Statoil developed Lulita with two subsea wells tied back to Harald platform, operated by Dansk Undergrunds Consortium. Initial output from Lulita was 8,500 b/d of oil, but production is expected to increase to 10,000 b/d. Statoil is working to complete development of Denmark's Siri field with a production and quarters platform mounted on a seabed crude oil storage tank.

Pipelines

Canada's National Energy Board approved a plan by Northstar Energy Corp. Ltd., Calgary, to construct and operate a $6.467 million (Canadian), natural gas pipeline spur from NEC's Coleman gas plant at Savanna, Alta. The 4.5-mile extension would cross Phillips Pass and connect to Alberta Natural Gas Co. Ltd.'s main line west of the Alberta-British Columbia border. Initial contract capacity is estimated at 37 MMcfd.

TransCanada PipeLines Ltd.
Calgary, let $430 million (Canadian) in pipeline maintenance, looping, and compressor-station construction contracts. Marine Pipeline, O. J. Pipelines, Robert B. Somerville, and a joint venture led by Steen Contractors Ltd. were awarded more than $309 million of the contract totals to install over 300 km of large-diameter pipe during June-November. More than $120 million in compressor-station construction and maintenance work was awarded to Adam Clark Co., BFC-Nicholls Radtke, Campbell-Cox Inc., Comstock Canada Ltd., Ganotec Industriel, State Group Ltd., and Venshore Mechanical Ltd. These companies will provide unit additions, construction enhancements, and compressor upgrades.

Williams Cos. Inc.
subsidiary Mid-America Pipeline Co., Tulsa, will expand its natural gas liquids pipeline system in the Rocky Mountains to 125,000 b/d from 75,000 b/d. The expansion involves construction of a 412-mile pipeline from northeast Utah's Daggett County to Bloomfield, N.M. The new line will run parallel to the existing Mid-America system. Construction is set to begin in August; the line is expected to be in service by Jan. 1, 1999.

Amber Energy Inc.,
Calgary, completed its Pelican Lake pipeline system, including 110 km of 20-in. pipe and modifications to the terminals at Wabasca and Nipisi. Amber is operator and has a 38.0% interest in the system, which can transport 150,000 b/d of blended heavy crude oil. Meanwhile, Amber completed construction of the central battery and gathering system for its 137 producing horizontal oil wells at Pelican Lake.

Companies

Enron Corp., Houston, has purchased $50 million in shares of Costilla Energy, Inc., Midland, Tex. The shares of a new series of convertible preferred stock were priced at $1,000/share. Costilla will use the proceeds to pay off existing bank debt. Costilla's drilling plans are currently focused on deep gas targets, primarily in south and east Texas.

Conoco Inc.
sold a 50% share in its Gulf of Paria West exploration block in eastern Venezuela to Italy's Agip SpA and a unit of Taiwanese state oil firm Chinese Petroleum Corp. (CPC). Agip will take a 40% share and CPC 10%. Conoco will retain a 50% interest and operatorship. The partners are acquiring seismic data and will spud a well in fourth quarter. Petroleos de Venezuela SA unit Venezuelan Petroleum Corp. has an option to purchase up to a 35% stake in the block.

EVI Inc.,
Houston, completed its previously announced merger with Weatherford Enterra Inc. (OGJ, Mar. 9, 1998, Newsletter). The new company is called EVI Weatherford Inc.

Statoil
and Halliburton Co. unit Halliburton Energy Services agreed to undertake a 4-year joint development of an advanced drilling system (ADS). Cofunded by the companies, the project will try to overcome many limitations associated with conventional drilling systems. ADS will provide high-quality reservoir data and steering capabilities for wells with highly complex paths to measured depths approaching 15 km, the companies said.

Shell Oil Co. unit
Shell Technology Ventures Inc. and Halliburton Energy Services signed a memorandum of intent to further develop and commercialize expandable casing technology. The new technology, developed by Shell, will reduce drilling costs, especially in deepwater applications, the companies claimed. Shell and Halliburton will form a limited liability company, managed and funded equally by the firms.

Hilcorp Energy Co.,
Houston, acquired for $88 million Amoco Production Co.'s interests in 41 onshore oil and gas properties in Texas, Louisiana, and Mississippi. Included are 1,000 operated and nonoperated wells. Net production attributed to the properties is 1,200 b/d of oil and 25 MMcfd of gas.

The proposed merger
of Calgary's Petro-Canada Ltd. and San Antonio's Ultramar Diamond Shamrock Corp. (OGJ, Jan. 12, 1998, Newsletter) hit a regulatory roadblock when the Competition Bureau of Canada ruled that the combine raises concerns of market dominance. The companies said they will continue to pursue the merger of their refining and marketing businesses in Canada and the northern U.S. and will provide additional data to regulators.

NGC Corp.,
Houston, changed its name to Dynegy Inc. Natural Gas Clearinghouse and Electric Clearinghouse will be combined and named Dynegy Marketing and Trade; Destec Energy will become Dynegy Power Corp. Warren Petroleum Co. will be Dynegy Midstream Services Ltd.; NGC Oil Trading & Transportation Inc. will be named Dynegy Oil Trading & Transportation Inc.; and NGC United Kingdom Ltd. and NGC Canada Inc. will be named Dynegy United Kingdom Ltd. and Dynegy Canada Inc., respectively.

Power

Dynegy Inc. will build a gas-fired, four unit, 600-MW generation plant in Rockingham County, N.C. Duke Power, the regulated electric utility of Charlotte, N.C.-based Duke Energy Corp., signed a letter of intent to purchase all of the plant's output. Dynegy is finalizing scope, design, and procurement details for the plant. The contract term with Duke begins June 1, 2000, and runs through yearend 2003; Duke has the option to extend it through 2008.

A group of Norwegian oil
and electricity companies postponed a decision to build two gas-fired power plants at Karsto, north of Stavanger, and Kollsnes, near Bergen. The Naturkraft venture of Statoil, Norsk Hydro, and state electric utilityStatkraft decided to postpone plans to study a new technology hydro claims can allow gas-fired power generation with minimal CO₂ emissions. Hydro's technology splits out hydrogen to fuel the power plant and removes resulting CO₂from the reaction before combustion. The group is considering using CO₂from the plant for injection into Grane oil field, one of several Norwegian fields in line for development.

Copyright 1998 Oil & Gas Journal. All Rights Reserved.