INDUSTRY BRIEFS

Correction

An LNG terminal owned by Duke Energy Corp. unit Trunkline Gas Co. was incorrectly described as being on the Texas Gulf Coast (OGJ, Nov. 9, 1998, p. 37). The terminal is in Lake Charles, La.

Cogeneration

Amoco Power Resources Corp., Amoco Canada Petroleum Co. Ltd., and CU Power International Ltd. commissioned an 84-MW cogeneration facility at Amoco's Primrose heavy oil operation 186 miles northeast of Edmonton. Total capital cost of the project is about $50.5 million. The plant will generate electricity from natural gas and use exhaust heat to generate steam for enhanced recovery of heavy oil.

Drilling-production

Elk Point Resources Inc., Calgary, said East Lost Hills Bellevue 1 well, 45 miles northwest of Bakersfield, Calif., blew out Nov. 23. Boots and Coots Inc., Houston, arrived on the scene early Nov. 24 to bring the well under control. At presstime, the cause of the blowout was still unknown, said operator and Elk Point subsidiary Bellevue Resources Inc. The rig's 17 workers escaped injury.

Syria's Petroleum Ministry
signed a gas development service contract with equal partners Elf Aquitaine and Conoco Inc. The firms will spend $430 million to utilize associated gas now flared in the Deir ez Zor area and to develop Elf's Tabiyeh gas/ condensate discovery. The project includes construction of a gas gathering system and processing plant and a 250-km pipeline to carry an expected 150 MMcfd of gas to the national grid near Palmyra. Gas will be reinjected in Tabiyeh field to enhance condensate recovery during the early years.

Hungary's MOL
capped a 3-day carbon dioxide leak on Nov. 17 at an oil well at Nagylengyel in Zala county, western Hungary. The leak, from 6,900 ft at -22° F. at 224 bar, was mainly CO2 with some hydrogen sulfide. A total volume of 1.1 MMcf escaped. About 2,500 residents were briefly evacuated from low-lying villages where gas was accumulating above ground. No injuries were reported.

CEP International Petroleum,
Calgary, completed a participation agreement with Kamchatgasprom to drill two wells on a 200 sq km license area on the Kamchatka Peninsula of far eastern Russia. Under terms of the agreement, CEP will earn a 75% interest in the license-holding company by paying 80% of the drilling costs. The wells will be drilled to a depth of 4,500 m in the winter of 1999-2000. There are three gas fields on the license with combined reserves of 650 bcf. CEP's wells will target tertiary overpressured condensate reservoirs beneath Kshuk, the largest of the three fields, and oil-prone structures in the northern portion of the license area.

Statoil
reported that bad weather prevented the installation of a production platform in Siri field off Denmark, which will prolong the start of production until early 1999. Statoil intended to begin producing Siri oil in November. The platform's storage tank base was installed in May (OGJ, Aug. 17, 1998, p. 49). The topsides was towed out from Stavanger in October but had to be towed to shelter at Flekkefjord, on Norway's southern coast. A second installation attempt was prevented by bad weather in early November. Statoil is waiting for a new weather window to try again.

Ramco Energy plc,
Aberdeen, received consent from Azerbaijan to rehabilitate onshore Muradkhan* field. The production-sharing agreement gives Ramco a 50% interest and operatorship of the project, with State Oil Co. of the Azerbaijan Republic holding 50%. Discovered in 1969, Muradkhan* lies 110 miles southwest of Baku, alongside the route to be taken by the Azerbaijan International Operating Co. export pipeline, due to be completed next year. Ramco reckons the field has more than 5 billion bbl of oil in place. Ramco hopes to produce first incremental oil by mid-1999 and drill two new wells later that year.

Norsk Hydro AS
agreed to pay Umoe Oil & Gas AS, Haugesund, Norway, an additional 480 million kroner to complete Visund platform and an additional 610 million kroner to complete Troll C platform. This will take total costs to build the Visund platform to 5.2 billion kroner, compared with an original estimate of 3.5 billion, and total costs of Troll C to 6 billion kroner, up from 4.1 billion. Hydro blamed the cost hikes on a greater than anticipated number of hours spent on engineering and fabrication, increased materials costs, and changes. Hydro said both projects are financially sound, even at current oil prices.

Refining

Qatar General Petroleum Co. unit National Oil Distribution Co. (Nodco) secured about $510 million in financing from a banking group led by Barclay's of the U.K. for the expansion and modernization of its 57,500 b/d refinery at Umm Said, Qatar. Nodco let a $686 million contract for the expansion work (OGJ, Aug. 10, 1998, p. 30) but procured only $510 million. It had hoped to obtain 100% of the project costs.

Environment

U.S. Environmental Protection Agency said Balko Inc., Conrad, Mont., and its president, John Balkenbush III, were indicted in U.S. District Court at Great Falls, Mont., for allegedly injecting production wastes into abandoned wells without permits. The company faces fines up to $500,000 and Balkenbush a maximum sentence of up to 3 years imprisonment and/or a $250,000 fine.

Companies

Newport Petroleum Corp., Calgary, purchased Fort Worth-based Union Pacific Resources Group's 7.9% interest in Alberta's Caroline-Swan Hills natural gas field and related facilities for $165 million (Canadian). The Swan Hills sour gas field "A" pool now produces 370 MMcfd of raw gas and has estimated reserves of 2.1 tcf.

New Cache Petroleum Ltd.,
Calgary, accepted a $128 million (Canadian) takeover offer from Abraxas Petroleum Corp., San Antonio. Abraxas will merge New Cache with its Canadian unit, Abraxas Petroleum Ltd., Calgary, and its 50% interest in Grey Wolf Exploration Inc.

Novus Petroleum Ltd.,
Sydney, plans to sell a portfolio of Carnarvon basin permits off Western Australia to Apache Corp., Houston, for $49 million. The assets include interests in the Harriet and Airlie producing areas. Further payments may be made following quantification of reserves in the recently discovered Gipsy-Rose-Lee complex.

Mobil North Sea Ltd.
sold U.K. North Sea assets with combined net reserves of 11 million boe to Canada's Bow Valley Energy Ltd. unit Bow Valley Petroleum (U.K.) Ltd. The assets include a 20% interest in Northwest Hutton field, an 0.5% stake in Hudson field, a 25% interest in the Victor gas field, a 9% interest in the Block 16/18 exploration license, and a 25% interest in an exploration license for Blocks 19/5 and 20/1. Mobil said the sale was part of a move to focus on its Beryl-area assets in the northern North Sea and on southern gas basin operations.

BHP Petroleum Pty. Ltd.
sold its U.K. southern North Sea exploration and production assets to electricity and gas utility Eastern Group plc, Ipswich, U.K., for £100 million. The deal included BHP's 18% and 30.11% respective interests in the Ravenspurn and Johnston gas fields, plus interests in seven exploration licenses, including some with gas finds. The properties have proved and probable reserves of about 10.7 million boe and production of 2,400 boed. BHP said the sale was part of its plan to dispose of assets with no prospect for growth, while Eastern is collecting a portfolio of "midstream" gas assets.

Houston Exploration Co.,
Houston, plans to acquire certain producing assets off Texas from Chevron USA Inc. for $85.28 million. The assets include 100% working interests in three adjacent lease blocks totaling 17,280 net acres in the Mustang Island area. The blocks have nine producing wells, three production platforms, and average net production of 37 MMcfged.

Finland's Fortum Corp.,
created by the merger of state petroleum firm Neste Oy and power utility Imatran Voima Oy (OGJ, Dec. 29, 1997, p. 23), is being floated through an institutional share offering that opened Nov. 23. A total of 160 million shares, including 25 million earmarked for foreign institutions, will be sold to reduce the state's share in the company to 77.6% from 97.5%. The sale is expected to close Dec. 9, and the final price range for shares is predicted by Fortum to be 27-33 markka/share.

Exports-imports

Italian state firms Enel and Snam revised conditions relating to Snam's natural gas sales contract to electricity generator Enel and the transportation of natural gas from Algeria on behalf of Enel. The new sales agreement is effective from Oct. 1, 1998, through Sept. 30, 2003, with another revision possible on Oct. 1, 2000. Under terms of the agreement, Enel may choose different supply conditions-firm, interruptible, or a combination of both-for individual power plants. Enel reconfirmed its intention to buy 6 billion cu m/year of gas, of which about 3 billion cu m will be under firm supply conditions.

Malaysian state firm Petronas
signed a 1-year crude oil supply contract with Indonesia's Pertamina, to begin Jan. 1, 1999. Petronas will supply Pertamina with 20,000 b/d of Malaysian oil, with Pertamina having the option to receive an additional 20,000 b/d. The contract is the first direct business arrangement between the two state oil companies, said Petronas. Pertamina has purchased a total of 7.6 million bbl in spot cargoes from Petronas since July.

LNG

Enron India Ltd. agreed to sign a 20-year LNG supply agreement with Oman Liquefied Natural Gas. Under the contract, Enron will purchase 1.7 million metric tons/year of LNG. The contract is worth $400 million.

Exploration

Petro-Canada made its fifth oil and gas discovery on the 8,195 sq km Tinhert permit in Algeria's Illizi basin. On initial test, Tahala North 1 flowed 3,335 b/d of oil, 2,805 b/d of condensate, and 77.5 MMcfd of gas. Petro-Canada has drilled seven exploration wells on the permit.

Cultus Petroleum NL,
Sydney, announced an oil discovery off Taranaki, New Zealand. Wire line log analyses of Maari-1 well identified 56 m of net oil-bearing sands in three target zones. Operator Shell Todd Oil Services Ltd. is anticipating sustainable flows of at least 2,000 b/d.

Maxus Bolivia Inc.,
a unit of Argentina's YPF SA, successfully tested the Margarita 1-X exploration well in southern Bolivia, said license partner BG Exploration & Production Ltd. The well lies on Caipipendi block in the foothills of the Andes. On test, the well flowed 23 MMcfd of gas and 740 b/d of condensate through a 1/2-in. choke over a 48-hr period at a stabilized flowing pressure of 4,625 psi. Flow was limited by tubing capacity. Interest holders are: operator Maxus 37.5%, BG 37.5%, and the Union Texas de Bolivia Ltd. unit of ARCO 25%. Further appraisal drilling is planned with a view to production in 2000.

Public Energy Authority of Kentucky Trust
(PEAK) signed a contract to purchase 72 bcf of natural gas over the next 10 years from Unocal Corp. energy trading and marketing unit Unocal Global Trade. PEAK will pay $120 million to Unocal on Jan. 1, 1999, plus a monthly fixed reservation fee over the life of the contract. PEAK will receive about 23 MMcfd during winter and 17.5 MMcfd during summer through the Texas Gas Transmission pipeline.

Petrochemicals

UOP LLC, Des Plaines, Ill., gained exclusive rights to sell Tokyo-based Toray Industries Inc.'s TAC-9 process and catalyst outside of Japan and South Korea. The process uses an advanced catalyst to produce a high yield of mixed xylenes from a variety of feeds. Products contain up to 100% C9 and C10 aromatics. Processing a wider range of materials for paraxylene production reduces feedstock costs and increases feedstock selection options.

Pipelines

Shell Petroleum Development
Co. of Nigeria Ltd. let a $43 million contract to Bouygues Offshore for engineering, procurement, installation, and start-up of a gas pipeline system in the Niger Delta region, between Ekulama field and the Soku gas treatment unit south of Port Harcourt. The concrete-coated pipe, slated for delivery in July 2000, will be 18-in., 12-in., and 6-in.

Williams
placed into service its Cherokee expansion project along the Transco main line in Georgia, increasing capacity by 85.4 MMcfd. The $68 million natural gas expansion includes about 11 miles of 48-in. loop line, about 4 miles of 16-in. replacement pipe along the North Georgia extension, a new 15,000-hp compressor station in Caweta County, Ga., and an added 8,000 hp at its Station 125 in Walton County.

Gas storage

British Columbia Ministry of Energy and Mines granted Unocal Canada Ltd. the right to increase maximum storage capacity at Aitken Creek natural gas storage reservoir. Unocal initially will increase working capacity by 20%, to 48 bcf, by second quarter 1999, in anticipation of connecting to the planned Alliance pipeline in 2000. Working capacity ultimately will be 80 bcf. Aitken Creek owners are Unocal 93.79% and Amoco Canada Petroleum Co. Ltd. 6.21%.

Power

Centrica plc signed an agreement with South Coast Power Ltd., a joint venture of electricity utility Scottish Power and CSW International, to provide gas for a power station to be built near Brighton, U.K. The 400-MW combined-cycle, gas-fired plant will be built on the site of the former Brighton B coal-fired station. The plant is expected to start up in fourth quarter 2000. Centrica will provide 250 million MMBTU of gas over 15 years.

Copyright 1998 Oil & Gas Journal. All Rights Reserved.