Industry Briefs

NGL

Norway's Statoil let a $138 million contract to Raytheon Engineers & Constructors to upgrade its onshore crude oil unit and build a natural gas liquids fractionation plant at its 154,000 b/d Mongstad refinery. Raytheon also will construct LPG storage caverns and a loading jetty. The work is part of Statoil's Vestprosess project, designed to integrate oil and gas production facilities at Mongstad, Sture, and Kollsnes, on Norway's west coast. Work is scheduled for completion in mid-1999.

LNG

South Korea's Kogas will charter four new 138,000 cu m membrane liquefied natural gas vessels for imports from Oman and Qatar. The vessels are under construction at South Korea's Daewoo and Hanjin shipyards. The carriers will use Gaztransport and Tecnigaz type GT96 double-membrane containment systems.

Petrochemicals

Shell Nederland Chemie BV began a $145 million expansion of an ethylene cracker at its Moerdijk, the Netherlands, plant. Plant capacity will increase to 900,000 metric tons/year from 650,000 tons/year, with work slated for completion in mid-2000. Shell said the expansion will include the advanced recovery system process licensed by Stone & Webster Engineering Ltd., Milton Keynes, U.K.

PCD Polymere GmbH,
Schwechat, Austria, signed a cooperation agreement with OPP Petroquimica SA, Sao Paolo. The companies, subsidiaries of, respectively, OMV AG and Brazil's Odebrecht Perfuracoes Ltda., use identical technology to make polypropylene. The agreement enables PCD to supply its South American customers with polypropylene made locally by OPP, and OPP to provide European customers with polypropylene made by PCD.

BP Energy Ltd.
and European Vinyls Corp. (U.K.) Ltd. (EVC), Blackpool, U.K., formed a partnership to build a combined heat and power (CHP) plant at EVC's polyvinyl chloride plant. The £4 million ($6.4 million) CHP scheme will have capacity to generate 5 MW of electric power and 15 metric tons/hr of steam and will supply hot exhaust gases for the drying stage of the PVC process. The plant is expected to reduce EVC's CO2 emissions by 32,500 tons/year and to reduce power purchase costs by £500,000/year ($800,000/year).

Government

U.S. Minerals Management Service issued a rule that clarifies a provision that gives it authority to disqualify operators for poor safety performance on the Outer Continental Shelf. A public meeting is set for Mar. 24 in Houston to set criteria for the disqualification provision.

MMS
scheduled hearings to discuss changes to its proposed rule regarding the value of federal oil production for royalty purposes (OGJ, Feb. 16, 1998, p. 36). They will be held Feb. 25 in Washington, D.C.; Mar. 2 in Lakewood, Colo.; Mar. 11 in Bakersfield, Calif.; and Mar. 12 in Casper, Wyo.

Pipelines

U.S. Department of Transportation Research and Special Programs Administration (RSPA) proposed a rule to allow designated pipeline operators to implement risk-based pressure testing schedules and technologies. Operators interested in the pilot project must apply by Dec. 7.

RSPA
scheduled a Mar. 4 meeting in Phoenix on federal gas pipeline regulations for plastic pipe systems. The meeting will facilitate determining whether changing current rules governing plastic pipe system design, construction, and maintenance are needed.

NOVA Ventures,
a unit of Calgary-based NOVA Corp., agreed to build a 67-mile natural gas pipeline in the Fort McMurray region of Alberta. The $40 million (Canadian) line will have an initial capacity of 250 MMcfd and move incremental gas, to be used as fuel for increasing oilsands activity in the region. NOVA has an agreement in place with oilsands operator Suncor Energy Inc. and expects to complete an agreement with Novagas Canada Ltd. Construction is scheduled for fourth quarter 1998 and completion in first quarter 1999, subject to regulatory approval.

Drilling-production

Phillips Petroleum Co.'s Tyonek B-2 well, targeting the Tyonek Deep oil play in Alaska's Cook Inlet, successfully tested the Sunfish and North Forelands zone intervals. The Sunfish zone flowed 2,000 b/d of oil through a 45/64-in. choke at a depth of 13,110-13,170 ft. The North Forelands zone flowed 1,125 b/d through a 30/64-in. choke at a depth of 13,652-13,966 ft. Both zones produced 39-43° gravity oil. Operator Phillips 100% drilled the well to a measured depth of 14,537 ft in 100 ft of water.

Terra Nova Alliance
let a $170 million (Canadian) contract to Coflexip Stena Offshore Group for design, construction, and installation of a floating production, storage, and offloading ship, subsea components, and pre-production wells in the Terra Nova oil field. The contract follows an agreement by the alliance to proceed with development of Terra Nova field on the Grand Banks, 350 km east-southeast of St. John's, Newf. (OGJ, Dec. 22, 1997, p. 30). Work is scheduled for completion in 2000.

The barge Cherokee,
while under tow, collided with a Walter Oil & Gas Corp. platform in the Gulf of Mexico on West Delta Block 112, confirmed Global Industries Ltd. There was fire damage to the platform and barge equipment, a Global source said. The cause of the fire and accident is under investigation. There was no environmental damage. The U. S. Coast Guard is investigating the incident. There were no fatalities, but eight Global personnel were evacuated to area hospitals and released later. The remainder of the crew is on the barge and en route to port.

Lasmo plc's
appraisal well on Libya's Block NC 174 (OGJ, Nov. 3, 1997, Newsletter) cut more than 300 ft of net pay and flowed an aggregate 9,000 b/d of 39° gravity oil on test. London-based Lasmo said the well proved a substantial southerly extension of its Elephant discovery, and could increase reserves to more than 500 million bbl of oil. A second appraisal well, F3-NC 174, will be spudded in the next few weeks. Further appraisal drilling is planned later this year.

Gas distribution

U.S. Department of Transportation issued a rule that requires gas utilities to inform customers that excess flow valves are available for new or replaced single-residence service lines. The American Gas Association praised DOT for not requiring utilities to spend $20-50 million/year to maintain and replace the valves.

U.K. gas industry
regulator, Office of Gas Supply (Ofgas), set Mar. 27 as the date when the residential market in Cheshire and West Yorkshire will be opened to competitive supply (see related story, p. 38). The 2.9 million homes in the area will increase the number of U.K. households with a choice of gas supplier to more than 10 million-just over half the U.K. market. Ofgas said it is on target to have a fully competitive residential market throughout the U.K. by summer.

Associations

The American Bioenergy Association has been formed through the merger of Biomass Energy Advocates and the National Biofuels Association. The group plans to work this year for extension of the ethanol tax subsidy and expansion of the incentive for biomass power.

Environment

U.S. Environmental Protection Agency issued a rule allowing Indian tribes to implement Clean Air Act programs if those implementation plans meet with the agency's approval. Tribes will receive authority over all emissions sources within the exterior boundaries of a reservation, including non-Indian owned "fee lands."

Exploration

Exxon Corp.'s Trinidad affiliates signed two production sharing contracts in Port of Spain, Trinidad and Tobago, for Blocks 25(b) and 26, which Exxon was awarded in Trinidad and Tobago's 1997 Phase 3 tender round (see map, OGJ, Oct. 7, 1996, p. 41). The two blocks cover 350,000 acres and 300,000 acres, respectively, and are 60-75 miles off Trinidad in 2,500-4,300 ft of water.

BHP Petroleum Pty. Ltd.
disclosed a discovery on Block 402a in the Berkine basin of east-central Algeria. Bir Sif Fatima-1 new-pool wildcat flowed 1,960 b/d of 48° gravity oil through a 1/2-in. choke with wellhead pressure of 2,334 psi. The new-pool well was drilled to 3,400 m TD, cutting pay in a Triassic formation that predominates on the block. A well on the main structure also encountered hydrocarbons in the Triassic and will be tested late this month. BHP is considering further exploration and appraisal drilling.

Tengizchevroil
joint venture let contract to Schlumberger Geco-Prakla, a unit of Schlumberger Ltd., to conduct a 1,155 sq km 3D seismic survey over Tengiz oil field in Kazakhstan. The work is planned over 12 months. Tengiz has estimated reserves of 6-9 billion bbl of oil. Production is expected to reach 185,000 b/d by the end of 1998 and 240,000 b/d in 2000. The joint venture partners are Chevron Corp. 45%, Kazakhstan 25%, Mobil Corp. 25%, and LukArco 5%.

Pioneer Natural Resources Co.,
Dallas, signed a technical cooperation agreement with South Africa. The agreement gives Pioneer the exclusive right to study and negotiate a petroleum contract on offshore Blocks 10, 11A, 12A, 13B, and 14B, which cover more than 5 million acres along the country's southern coast in water depths less than 650 ft. The blocks are between Block 9, which contains Oribi oil field and F-A gas field, and Pioneer's 13A/14A study block off Port Elizabeth.

Ottawa's Northern Affairs Department
invited bids on 247 million acres on Canada's Mackenzie Delta, Beaufort Sea, and western Arctic Islands. Nominations for land will close April 9. Posted parcels will be included in a competitive call for bids scheduled to close in August. There have been 53 discoveries in the region, including two major oil fields and one major natural gas field.

Shell Exploration & Production BV
signed a production-sharing contract with the government of Trinidad & Tobago, for offshore Block 25. The 1,400 sq km block lies east of Trinidad in as much as 1,300 m of water. Shell is operator and 60% interest holder in the license, with Italy's Agip SpA holding 40%. The work commitment for the license includes acquisition of 3D seismic data and drilling of three exploration wells in the first 4 years.

BP Exploration Operating Co. Ltd.
signed a production-sharing agreement with the government of Mozambique and state firm ENH for the Zambezi basin license area. BP signed a memorandum of understanding for the area in September 1996, which led to initial surveys over an 80,000 sq km area (OGJ, Oct. 7, 1996, p. 39). The license covers 40,000 sq km off the Zambezi Delta. The company agreed to acquire and process 15,000 line km of 2D seismic data over the license area in first half 1998.

Hungary's
MOL Rt. signed a production-sharing agreement with Yemen for the North Mukalla license area, Block 48. In the first 3 years, MOL will acquire 500 line-km of 2D seismic across the 5,055 sq km block and deepen two existing exploration wells. MOL signed a similar agreement for Southeast Al Maber area (Block 49) in April 1997.

Exports-imports

Abu Dhabi agreed to supply natural gas through a pipeline to Dubai that could undercut an offer made by Iran, according to Agence France Presse. The Abu Dhabi National Oil Co. said most of the gas would come from its Abu Al-Bukhus field, which is partially operated by Total. Abu Dhabi will supply about 800 MMcfd through a 75-mile pipeline to Jebel A* free zone, about 25 miles south of Dubai, according to press reports.

Power

York Research Corp.'s Trinidadian subsidiary will construct a $100 million natural gas-fired combustion turbine plant in Trinidad and Tobago. The wholly owned subsidiary, Inncogen Ltd., will sell the output of the 215 MW plant commencing in fall 1999, under a 30-year contract with Trinidad and Tobago Electricity Commission. Power from the Inncogen plant also may supply a new industrial development project, to include glass, paper, and particle board plants and an ethanol refinery.

Companies

Unocal Canada Ltd. will exchange Canadian oil and gas assets with Tarragon Oil & Gas Ltd. for about $215 million in Tarragon shares-a 28.7% stake in Tarragon. Unocal Canada will transfer producing oil and gas assets and undeveloped lands in Alberta and British Columbia to Tarragon. Assets include proved reserves of 31 million boe, 348,000 net acres of undeveloped land in Alberta, 35,000 acres in British Columbia, 57,000 km of 2D seismic data, and 3,000 sq km of proprietary 3D seismic. The undeveloped land comprises 330,000 net acres in Alberta and 35,000 net acres in British Columbia.

LukArco,
a joint venture of ARCO and Russian company Lukoil, will assume Lukoil's 60% interest in Block D-222, about 93 miles northwest of Baku in the Caspian Sea. Known as Yalama, the block comprises 386 sq miles. In 1997, Lukoil and State Oil Co. of the Azerbaijan Republic (Socar) agreed to exploration, development, and production-sharing terms for the block. A Socar affiliate holds the remaining 40% interest in the block. Lukarco will be operator of the block and plans seismic studies this year.

Canadian Fracmaster Ltd.,
Calgary, acquired two U.S. oil field stimulation service companies: Texas-based Western Acidizing Services Co. and Coleman Cementing Inc., of Arkansas.

Copyright 1998 Oil & Gas Journal. All Rights Reserved.