June 21, 1999
A June 10 explosion


A June 10 explosion on Olympic Pipe Line Co.'s products pipeline near Bellingham, Wash., killed three people. Olympic said the line leaked about 84,000 gal of gasoline; other estimates peg the volume at 300,000 gal. The spilled fuel ignited, and areas of fuel-soaked ground burned for several days, preventing investigators from starting work. Olympic shut down the northern half of the line, which ships products from ARCO and Tosco Refining Co. refineries at Ferndale, Wash. On June 14, investigations and reroutings were expected to take several days. ARCO and Tosco are transporting fuels via barges and other means.


Talisman Energy (U.K.) Ltd. and partners completed the sixth development well in the U.K. North Sea's Ross field (OGJ, Apr. 26, 1999, p. 32). On test, 13/29a-A4 (RP1) flowed 19,000 b/d through a 96/64-in. choke for 6 hr, limited by surface testing equipment, said Talisman. The well was drilled to 16,614 ft TD, with a 3,100 ft horizontal section in the reservoir. It will be tied into Bleo Holm floating production, storage, and offloading vessel by June 21 (see photo, p. 57). It is the fourth of five planned production wells; drilling of the fifth has begun. Two water injectors have been completed, and two more are planned.


Showa Shell Sekiyu KK, General Sekiyu KK, and Esso Sekiyu KK signed a 10-year products distribution agreement in Japan. Under the accord, the three major Japanese refiner-marketers will supply each other with gasoline and middle distillates from their refineries and storage facilities in Japan. The storage facilities handle a total of 2 million kl./year of petroleum products, said the companies. The firms each aim to reduce distribution costs by ¥0.5-1 billion/year under the tie-up.

Argentina's Perez Companc
wants to sell about half its participating interest in the San Carlos block in Venezuela's oil and gas-rich Barinas-Apure basin. Perez official Carlos Cortizas called the block "highly promising." Should Perez Companc discover hydrocarbons on San Carlos, Petroleos de Venezuela SA has the right to take 35% of production under a production-sharing agreement with Perez Companc. Perez also holds equity stakes in Venezuela's Mata and Oritupano-Leana oil producing areas.

Shell U.K. Ltd.
and operating coventurer Esso Exploration & Production U.K. Ltd. plan to acquire a farm out on the portion of North Sea Block 21/24 license that lies outside the Guillemot West and Guillemot Northwest fields, which Shell/Esso developed. The partial block is operated by Veba Oil & Gas U.K. Ltd. Shell said the deal is contingent on completion of an exploration well being spudded no later than July 2000. If the deal goes through, this portion of Block 21/24 will be owned 50% by Veba and 25% each by Shell and Esso.

sold its Bulgarian exploration unit OMV (Bulgaria) Exploration EOOD to Petreco SARL, Luxembourg, for $1.5 million plus a further $500,000 when Galata gas field is brought into production. OMV Bulgaria holds a 162/3% interest but said it wants to withdraw from the project because the field is relatively small, with gas in place estimated at 49 bcf. OMV retains a marketing subsidiary based in Sofia.

Ramco Energy plc,
Aberdeen, acquired at no cost the working interest in Romania's Block VI from Clyde Expro Ltd., Ledbury, U.K. This takes Ramco's stake to 100% of contractors' equity from 30%. Ramco bought into the block by taking over MMS Petroleum plc, and Clyde has funded seismic work to discharge obligations to MMS. The production-sharing agreement is now owned 51% by state firm Petrom and 49% by Ramco. Ramco is completing a 200 line-km 2D seismic survey. The license gives exploration and production rights to structures below existing Petrom fields on the 1,781 sq km block.

PP&L Global Inc.
agreed to acquire additional shares of Chilean electricity distributor Empresas Emel SA from Las Espigas SA, Gavilla SA, and individuals related to Las Espigas Group. Total cost of the interests is estimated at $100 million. The deal, expected to close by the end of June, will take PP&L's ownership stake in Emel to 66.7% from 37.5%. In a separate transaction, South Western Electricity plc-PP&L Global's U.K. joint venture with Atlanta-based Southern Co.-is selling its electricity supply business to London Electricity for £160 million.

Gas gathering

Sid Richardson Gasoline Co., Fort Worth, acquired the Mi Vida gas gathering and treating system from Western Gas Resources Inc., Denver, for an undisclosed sum. The purchase became effective June 1. Mi Vida comprises more than 250 miles of mostly large-diameter gathering lines in the West Texas counties of Culberson, Loving, Pecos, Reeves, Ward, and Winkler. Included is more than 200 MMcfd of H2S and CO2 treating capacity. The assets will be owned and operated by a new subsidiary, to be named Mi Vida/Richardson Gas Treating LP.


Indian Oil Corp. and Abu Dhabi National Oil Co. are in negotiations regarding a proposed joint-venture grassroots refinery in southern India. The $1.8 billion plant would be built at Nagapatnam, Tamil Nadu, and would have a capacity of 9 million metric tons/year. IOC and Adnoc would each hold a 26% stake in the project, with the remainder being offered to local and international financial institutions.

Pakistan's Attock Refinery Ltd.
(ARL) completed a $54 million upgrade of its 30,500 b/d refinery at Rawalpindi (OGJ, Oct. 19, 1998, p. 44). The upgrade included the addition of a new 10,000 b/d vacuum distillation unit and a 5,000 b/d catalytic reformer. ARL can now produce an additional 5,000 b/d of high-octane gasoline and process another 10,000 b/d of heavy crude oil. An ARL official said local producers will supply 25% of the refinery's crude requirements.

Iraq has completed
a new 10,000 b/d topping refinery, according to local press reports. The unit will be commissioned within a few months. An Iraqi refining official reportedly also said the Basra refinery, damaged last December by U.S. bombing, has been repaired and is now running at 140,000 b/d.


Qatar General Petroleum Corp. (QGPC) and Phillips Petroleum Co. reportedly selected Houston's Kellogg Brown & Root (KBR) and France's Technip SA to build a petrochemicals plant at Mesaieed, Qatar, (OGJ, Apr. 27, 1998, p. 33). A formal engineering, procurement, and construction agreement is expected in July, once financing is in place. Capacities for the $1 billion project would be: 500,000 metric tons/year of ethylene, 273,000 tons/year of high-density polyethylene, 189,000 tons/year of linear low-density polyethylene, and 47,000 tons/year of hexane-1. KBR's ethylene technology and Phillips's polyethylene and hexane-1 processes will be used. QGPC will own 51% and Phillips 49% of the plant.

Saudi Basic Industries Corp.
(Sabic) plans to build a 200,000 metric ton/year acetic acid plant at Yanbu on the Red Sea coast. Sabic said the plant is likely to be incorporated into its Arabian Industrial Fibres Co. (Ibn Rushd) polyester manufacturing complex and is scheduled for commissioning by 2004. The acetic acid unit would provide feedstock for the manufacture of purified terephthalic acid (PTA) by Ibn Rushd, which has just completed a 350,000 ton/year PTA plant and a 730,000 ton/year aromatics plant.


Sabic signed a 2-year contract to supply 120,000 metric tons/year of methyl tertiary butyl ether to Pakistan. Sabic's three MTBE plants-at Ibn Zahr, Ibn Sina, and Sadaf-produce a combined 3 million tons/year.


Kuwait Petroleum Corp. (KPC) bought 205 retail fuel outlets in Belgium from Aral AG, a unit of Germany's Veba Oel. KPC now owns 517 gasoline stations in Belgium and controls 17% of the domestic market, second only to Royal Dutch/Shell, which holds 18%. The acquired outlets will be transferred to KPC on July 1 and converted to the Q-8 brand by the end of 2000.


Overseas Shipholding Group Inc. (OSG), New York, ordered four 113,000 dwt Aframax-class crude tankers from Hyundai Heavy Industries Co. Ltd., Seoul, for delivery in 2001-02. The tankers will be used in OSG's growing Atlantic Basin business. Since 1996, OSG has participated with Petroleos de Venezuela SA in an Atlantic Basin Aframax pool, which now includes 19 tankers. The order is part of OSG's continuing fleet-renewal program.


Columbia Natural Resources Inc., the Appalachian basin's biggest gas producer, said it opened a new deep gas play in West Virginia. Its wildcat in the Vineyard Ridge area of Roane County found pay in Middle Ordovician Trenton-Black River after drilling to 10,300 ft TD. Bottomhole pressures were gauged initially at 6,600 psia. Columbia said the well's geologic characteristics resemble those in Trenton-Black River wells it has drilled in New York. Plans call for a confirmation test in the fall and another four wells targeted to the same formation below 10,000 ft on other prospects in the firm's 2 million acre Appalachian leasehold.

Conoco Inc.
announced a gas discovery on E-Plus prospect on U.K. North Sea Block 49/17, about 80 miles east of Lincolnshire, England. Well 49/17-13, drilled to 10,160 ft in 110 ft of water by Glomar Adriatic VI, cut 350-370 net ft of hydrocarbon-bearing sections of Rotliegendes sandstone. Further work is planned to determine the discovery's extent. Development options being considered include a normally unmanned, minimum-facilities platform tied back to the Lincolnshire Offshore Gas Gathering System or the Viking Transportation System, both of which carry gas to Conoco-operated Theddlethorpe terminal.

Phillips Petroleum Co. Norway
disclosed an oil and gas discovery on Block 2/7 in the Norwegian North Sea, 7 miles west of the nearest Ekofisk platform. Ebba 2/7-31, drilled to 16,300 ft TD, cut 120 ft of net oil and gas pay in the Permian Rotliegendes and 195 ft of net pay in Jurassic sandstones. On test, the Jurassic interval flowed at a stabilized rate of 1,780 b/d of oil and 4.25 MMcfd of gas through a 16/64-in. choke with flowing wellhead pressure of 6,570 psi. Oil was recovered by wire-line sampler from the Rotliegendes, but a flow test was deferred to a future well. Phillips has temporarily abandoned the well and is evaluating test, core, and log data.

Argentina's Energy and Ports Secretariat
delayed approval of a joint YPF SA-Unocal Corp. bid to explore for hydrocarbons on a block in the San Matias basin amid environmental concerns. The block, CAA-9, is part of an offering aimed at developing high-risk, marginal oil and gas areas. The Patagonian provinces of Rio Negro and Chubut, along with environmental groups, are lobbying to have the YPF-Unocal bid turned down. The 14,969 sq km tract is near Valdez Peninsula, a mating ground for whales; critics claim exploration in the area will damage the ecosystem. A final decision is not expected until after presidential elections in October.

Apache Corp.,
Houston, announced two natural gas discoveries on the Outer Continental Shelf in the U.S. Gulf of Mexico. On test, West Cameron 615 A-4 flowed 35 MMcfd of gas through a 38/64-in. choke with 2,000 psi flowing tubing pressure. The well was drilled directionally to a total vertical depth of 6,669 ft and a measured depth of 11,951 ft. It cut 180 ft of true-vertical-thickness pay in two Pleistocene zones and was perforated at 11,064-11,410 ft MD. Interests are Apache 75% and Santa Fe Snyder Corp. 25%. Separately, High Island 86 No. 1, a dual completion, flowed a combined 17.5 MMcfd from Miocene IO and JB sands. Interests are Apache 66.66% and Remington Oil & Gas Corp. 33.33%.


Enron Europe Ltd. was granted U.K. Department of Trade and Industry (DTI) approval to build a 45-MW combined heat and power station at the Teesside gas processing plant, Seal Sands, U.K. DTI said the unit is needed to enhance the reliability and efficiency of the existing process in order to meet the plant's heat and power requirements. The Seal Sands plant provides gas for a 1,875-MW cogeneration unit at the site, handling gas arriving onshore through the North Sea's Central Area Transmission System pipeline (OGJ, Apr. 19, 1993, p. 23).


LG&E Power Inc., a unit of LG&E Energy Corp., Louisville, Ky., plans to build a 450-MW natural gas-fired power plant at Monroe, Ga., about 40 miles east of Atlanta. LG&E did not disclose the plant's investment costs. Work on the Georgia project, which will receive gas from Williams' Transcontinental Gas Pipe Line, is slated to begin during first quarter 2000. Completion is slated for June 1, 2001.


A natural gas trade association was formed by six French companies; it will be based in Courbevoie, France. The association, called Union Professionelle des Industries Priv?es du Gaz (Uprigaz), will represent the interests of the firms, which operate or will soon operate in natural gas transportation, marketing, and trading within the country. Uprigaz comprises Vivendi unit Dalkia, Elf Aquitaine Gaz, Gaz du Sud Ouest, Total, and Suez Lyonnaise des Eaux and its Eylo unit. Elf Aquitaine Gaz Chairman Michel Romieu was elected to a 3-year term as Uprigaz's president.

Weather Risk Management Association
(WRMA) was incorporated in Washington, D.C., by officials of Castlebridge Partners LLC, Chicago; Enron Capital & Trade Resources Corp. (ECT), Houston; Koch Industries Inc., Wichita; and Southern Co. Energy Marketing, Atlanta. It will serve providers of financial tools designed to protect companies against weather conditions that can reduce revenues. WRMA officers are: Castlebridge's James Gosselin, president; ECT's Lynda Clemmons, vice-president; and Southern Co.'s Darren Wilcox, secretary-treasurer. Charter members include Castlebridge, ECT, Koch, Southern Co., Aquila Energy Corp., and Swiss Re New Markets.

Copyright 1999 Oil & Gas Journal. All Rights Reserved.