INDUSTRY BRIEFS

Correction

Unocal Corp. is operator of the Grayling platform in Alaska's Cook Inlet, not Forcenergy Inc., as reported incorrectly in a photo caption (OGJ, Sept. 7, 1998, p. 27).

Refining

Amoco Corp. reversed its decision to build the world's first fixed-bed alkylation (FBA) unit at its Yorktown, Va., refinery (OGJ, Dec. 1, 1997, p. 45). Amoco said the Haldor Topsøe AS FBA technology "is not economical at this time for the...refinery." Amoco remains interested in development of the technology and may consider using it in the future.

LG-Caltex Oil Corp.
chose the GT-BTX technology of GTC Corp., Houston, for an aromatics recovery plant it will build at its 633,600 b/d Yocheon, South Korea, refinery. GTC will also provide basic engineering, proprietary equipment, start-up and training services, and proprietary solvent. The unit will process 25,000 b/d of catalytic reformate and recover chemical-grade benzene and high-purity toluene. The process uses extractive distillation, rather than liquid-liquid extraction. Completion is scheduled for first quarter 2000.

Sun Co. Inc.
advanced by 4 months a planned 21-day maintenance turnaround on the 177,000 b/d crude distillation unit at its Philadelphia refinery. The move is in response to current market conditions: specifically, high inventories and low margins, said Sun. A scheduled 10-day turnaround on the refinery's 38,000 b/d catalytic reformer has also been moved up to coincide with the crude unit turnaround, which will begin Oct. 3. Sun has no other significant work planned on any major units at the refinery until 2000.

Pipelines

Columbia Gulf Transmission Co., Houston, plans to lay a 56-mile, 660 MMcfd gas pipeline in the Gulf of Mexico and expand its East Lateral system in southeastern Louisiana by 600 MMcfd. Open seasons for the projects end Sept. 29. The capacity is expected to be available in fourth quarter 1999. The pipelines will increase shipments of Gulf of Mexico gas to markets in the U.S. East, Northeast, and Midwest. The project, called Sea Star Pipeline Co. LLC, will consist of a 30-in. main line and two 24-in. laterals to ship gas from the South Pass and West Delta South Addition areas to a processing plant near Grand Isle, La.

Duke Energy Corp.,
Charlotte, N.C., is considering laying a 500-km gas pipeline from Wallumbilla, Australia, to Brisbane at an estimated cost of $150 million (Australian). The line would connect with Duke's existing 627-km pipeline from Wallumbilla to Gladstone, on Queensland's eastern coast, which in turn would provide a link with the proposed Chevron Niugini Pty. Ltd. gas pipeline from Papua New Guinea that will terminate at Gladstone (OGJ, Sept. 7, 1998, p. 38). Duke is seeking industrial and power generation customers to provide the 52-78 MMcfd of demand needed to ensure viability of the line.

Gas gathering

KN Energy Inc., Lakewood, Colo., and Devon Energy Corp., Oklahoma City, signed a letter of intent to form Thunder Creek Gas Services LLC to build a 126-mile, 24-in. gas gathering system in Wyoming's Powder River basin. Capacity will be 450 MMcfd. Total capital investment is estimated at $110 million. Completion is slated for first half 1999.

Exploration

Anadarko Petroleum Corp., Houston, tested its Tanzanite subsalt discovery on Eugene Island 346 (OGJ, Aug. 17, 1998, p. 116; Aug. 3, 1998, p. 31). Tanzanite 1 flowed 21,917 b/d of 21.9° gravity oil and 29.7 MMcfd of solution gas through a 11/2-in. choke with flowing tubing pressure of 2,679 psi. The well perforated a 50-ft interval of the 450-ft continuous column, said Anadarko. It let contract to Rowan Cos. Inc., Houston, to drill the first development well by the end of September. First production is expected in third quarter 2000.

The international consortium
Caspian International Petroleum Co. will drill a third exploratory well in mid-October on the Karabakh prospect in the Azeri sector of the Caspian Sea. The first two wells there have found only gas (OGJ, Apr. 13, 1998, p. 34). There had been disagreement among the partners of the consortium-Pennzoil Co., Agip SpA, Lukoil, and State Oil Co. of the Azerbaijan Republic-about whether a third well was needed, but they decided to make a third and final attempt to discover commercial oil on the prospect. This will fulfill the group's contractual obligations with the Azeri government.

Ocean Energy Inc.,
Houston, is acquiring 70% of Calgary-based First Calgary Petroleums Ltd.'s (FCP) 100% interest in a production-sharing agreement on Yemen's Block 43. Work commitments include reprocessing existing seismic, acquiring new seismic, and drilling two wells. Expenditures for the 5-year PSA will be $15 million, including $12.65 million that Ocean Energy will fund and $3.82 million that it will refund to FCP for costs incurred. FCP will retain a 25.2% interest and hold 4.8% in trust for a minority partner. Yemen Co., an affiliate of Yemen's oil ministry, holds a 15% carried interest in profits on the block.

London's Premier Oil plc,
on behalf of the Bolan Joint Venture Partners (Premier, Sydney's Novus Petroleum Ltd., and Pakistan's Government Holdings), made a gas discovery in Pakistan's Balochistan area. On initial barefoot test, Zarghun South 1, drilled to 2,172 m TD, flowed at a stabilized rate of 16.7 MMcfd of gas through a 56/64-in. choke with flowing wellhead pressure of 945 psi. On two subsequent cased hole tests, the well flowed 17.7 MMcfd through a 56/64-in. choke from the Jurassic and 7.2 MMcfd through a 1-in. choke from Paleocene and Cretaceous. It was the first well drilled on the concession.

Heavy oil

Sincor, a venture of Petroleo de Venezuela SA, Total Venezuela, and Statoil Venezuela AS, let contract to Foster Wheeler USA Corp., Clinton, N.J., for engineering, procurement, construction, and commissioning of a six-drum delayed coker and a gas recovery unit, to be built at Jose, Venezuela, as part of a heavy oil upgrading project (OGJ, Dec. 1, 1997, Newsletter). Completion is slated for 2001. The coker will use Foster Wheeler's Sydec process (OGJ, Aug. 31, 1998, p. 30). DIT-Harris, Proyecta, Technip, and Brown & Root Inc. will build the 180,000 b/d upgrader under a $750 million contract.

Cogeneration

Tenaska Frontier Partners Ltd., Arlington, Tex., secured financing for an 830-MW natural gas-fired combined-cycle cogeneration plant, to be built near Shiro, Tex. (OGJ, Dec. 8, 1997, p. 26). Construction will start immediately. Gilbert/Black & Veatch-Texas LP will provide engineering, procurement, and construction services. The plant will use three GE gas-fired turbine generators and one GE steam turbine generator.

Drilling-production

Houston's EEX Corp. will drill an appraisal well next quarter in Garden Banks Block 386 Llano field (OGJ, June 19, 1998, p. 40). The well will be drilled about 4,000 ft northeast of the discovery well bottom hole location, updip of the reservoir and slightly beneath a salt mass. EEX says the greater Llano area could have a gross, unrisked reserve potential of more than 1 billion bbl, although the full extent of it has not been imaged because of a shallow salt layer. Production may begin late in 1999.

Russian oil producer
Slavneft-Megionneftegaz let contract to a group led by Toyo Engineering Corp. and Itochu Corp., both of Japan, for engineering, procurement, and construction of a 32,600 metric ton/day oil treatment plant, to be built in western Siberia. The plant will treat crude oil and natural gas from five fields in the Megion area. Completion is slated for yearend 2000. The World Bank will loan the ?8 billion needed to build the facility as part of the bank's second lending initiative for rehabilitation of Russia's oil fields.

Repsol SA
and partners doubled planned spending for development of Egypt's Khalda concession to $100 million in the next 2 years. The group will drill 36 development wells, recomplete 30 wells, and conduct 24 fracture stimulations in the next 12 months. It has identified 88 drilling sites and 80 recompletion candidates. A 3D seismic survey is under way. The goal is to increase production by 15,000 b/d to 45,000 b/d by yearend 1999. Upon completion of two pipelines in 1999, gas output of 250 MMcfd will begin.

Enterprise Development Corp.,
Calgary, declared Guatemala's Las Casas field commercially viable following successful recompletion of Las Casas 1X well (OGJ, Aug. 31, 1998, p. 73). The well flowed at a maximum rate of 1,728 b/d of oil and solution gas, impeded by test separator capacity. Testing and production have been suspended until a 3,000 b/d separator is delivered, at which time the well will be placed on production and large-capacity surface production equipment will be installed. Attempts to test Las Casas 2X on the structure's flank were unsuccessful due to severe formation damage. Enterprise will rework the well.

U.K. Department of Trade and Industry
approved a plan by Shell U.K. Exploration & Production for disposal of a single-anchor leg mooring (SALM) buoy once used in Fulmar field on North Sea Block 30/16. The 5,000 metric ton SALM is moored in a Norwegian fjord. Shell plans to lift it with a crane barge and tow it to the Norsk Metallretur AS recycling yard at Hjelmeland, Norway. The SALM was removed from the field after Shell installed a pipeline to export oil from Fulmar, Gannet, Auk, and Clyde fields (OGJ, Mar. 31, 1997, p. 36).

Norsk Hydro AS
let contracts worth over $135 million to Heerema Marine Contractors VOF, Leiden, the Netherlands, for work on a new riser platform for Norway's Heimdal field. Heerema will build the platform deck and bridge at its Tønsberg yard in Norway and the jacket at Vlissingen, the Netherlands. ABB Offshore Technology AS, Oslo, will perform engineering work. The platform is due for installation in spring 2000. Heerema also won a contract to transport and install the platform, which will process gas from Huldra field and act as a gas transport hub from Oseberg field to the Statpipe trunk line.

Statoil AS
let a 250 million kroner ($35 million) contract to Aker Maritime AS, Oslo, to build the jacket for Huldra platform. Aker will build the jacket at its Verdal, Norway, yard and will perform engineering work before starting fabrication in June 1999. The jacket, slated for delivery in spring 2000, will be a conventional four-legged steel structure, 150 m high and weighing 5,200 metric tons.

Oilsands

Suncor Inc., Calgary, began test production at its new Steepbank oilsands mine near Fort McMurray, Alta. Production is varying but was about 120,000 metric tons/day at presstime. In 2001, Suncor will close its existing mine and increase Steepbank production to 223,000 tons/day. Synthetic crude production from Suncor's upgrader is about 95,000 b/d now and is expected to reach 105,000 b/d by yearend.

Companies

Costilla Energy Inc., Midland, Tex., agreed to acquire selected oil and gas assets from Pioneer Natural Resources Co., Irving, Tex., for $410 million. The assets are primarily in coastal area of Texas. The deal includes about 3,000 producing wells, proved reserves, significant leasehold acreage, seismic data, and gathering and distribution facilities. Costilla has identified numerous 3D prospects. It said the deal would effectively triple its size.

AEP Resources Inc.,
a unit of American Electric Power Co. Inc., Columbus, Ohio, will acquire the Louisiana and Texas natural gas midstream operations of Pittsburgh's Equitable Resources Inc. for $320 million in cash. The assets include: Louisiana Intrastate Gas, a 2,000-mile intrastate pipeline system; four gas processing plants and a fifth plant under construction; Jefferson Island storage facilities, including an existing salt dome storage cavern and a second cavern under construction, both of which are directly connected to the Henry Hub; and an energy trading business.

Collins & Ware Inc.,
Midland, agreed to acquire Union Pacific Resources Group Inc.'s (UPR) interests in certain South Texas oil and gas properties for $148 million (OGJ, Sept. 14, 1998, p. 38).

France's Total
agreed to sell Total Minatome Corp., Houston, to Energen Resources Corp., Birmingham, Ala., for $132.4 million. Upon closing, Energen will sell a 31% interest in the acquired assets to Westport Oil & Gas Co., Denver. Included are exploration and production properties, mainly in Louisiana and the shallow Gulf of Mexico. Energen will gain 200 bcfe of proved reserves and will spend $70 million over several years to exploit the approximate 45% of behind-pipe and proved undeveloped reserves. Total is refocusing its U.S. exploration activities in the deepwater Gulf of Mexico.

LNG

India's Petronet LNG Ltd. chose Ras Laffan LNG Co. (RasGas) to supply 7.5 million metric tons/year of liquefied natural gas to India via two LNG terminals Petronet is planning to build (OGJ, Aug. 17, 1998, p. 42). The Dahej terminal will receive 5 million metric tons/year and the Cochin terminal 2.5 million tons/year. The LNG will be produced at a plant at Ras Laffan, Qatar, from North field gas (OGJ, Apr. 27, 1998, p. 33). First deliveries are slated for 2002. RasGas, led by Qatar General Petroleum Corp. (QGPC) and Mobil Qatar Gas Inc., will also take a stake in the terminals and regasification units.

Petrochemicals

QGPC unit Qatar Vinyl Co. and Qatar Petrochemical Co., in which Elf Atochem SA owns a 10% stake, let contract to a combine of Germany's Krupp AG and Italy's Technipetrol SpA to build a vinyl plant at Qatar Vinyl's planned chloro-chemicals complex, construction of which will start late this year. Capacities at the complex will be 290,000 metric tons/year of caustic soda, 175,000 tons/year of dichloroethane, and 230,000 tons/year of vinyl. The vinyl will be used by Asian PVC makers. Start-up of the complex is slated for 2001.

Copyright 1998 Oil & Gas Journal. All Rights Reserved.