Industry Briefs

Nov. 15, 1999
Alberta set up an agency to promote the reduction of greenhouse gases in the province, which produces 80% of Canada's oil and gas, as well as most of its emissions of greenhouse gases.


A map of Gazprom's

proposed Trans-Baltic gas pipeline route was mislabeled as the "Trans-Balkan" pipeline route (OGJ, Nov. 8, 1999, p. 32).


Petrolera Argentina San Jorge

announced an oil discovery on Moy Aike Block in the Austral basin in Argentina's Santa Cruz province. On test, SJ.SCA.EIO.X-1 flowed 697 b/d of 40° gravity oil from the Cretaceous Springhill at 4,848-85 ft. San Jorge is calling the find El Indio Oeste and says additional drilling is planned to determine the field's extent. The well will be put on production immediately through existing production and storage facilities in the area.


Tuntex Gas Corp.,

Taipei, will embark on a $1.25 billion LNG import project in Kuangtang Industrial Park, in northern Taiwan. The first stage, to begin in February 2000, will involve constructing a 3 million tonne/year LNG terminal, to be completed by June 2003. The second phase, slated for completion by yearend 2007, will increase capacity to 7 million tonnes/year. Investors include: Tuntex Group, 37.5%; Uni-President Group, 12.5%; Japan's Mitsubishi Corp., 12.5%; China Development Industrial Bank, 7.5%; Chinese Petroleum Corp., 7.5%; Taiwan Power Co., 7.5%; ARCO, 5%; and Shin Kong Group, 2.5%. Tuntex will provide $312.5 million of capital for the project.

China Petrochemical Corp.

(Sinopec) let a $750,000 contract to Gaz de France engineering unit Sofregaz for the design of a 150,000 cu m/day gas liquefaction plant, to be built at Zhongyuan, Henan province, about 600 km from Beijing. The three-stage contract involves front-end engineering, technical assistance, and operator training. Road tankers will transport the LNG, which is intended to supply neighboring residential areas.


TotalFina SA

and Elf Aquitaine SA started up the multiphase pumps installed earlier this year on Dunbar platform, about 400 km northeast of Aberdeen on the UK continental shelf. The new pump technology-which enables concurrent liquids pumping and gas compression of commingled production-will deliver 40,000 b/d of liquids and 3 million cu m/day of gas from the platform, accelerating production and increasing reserves, says TotalFina. Production will be transported via a single, multiphase 22-km pipeline north to Alwyn platform (OGJ, Aug. 17, 1998, p. 86). Operator TotalFina holds a 33.3% interest in Dunbar; Elf holds 66.67%.

Husky Oil Ltd.,

Calgary, drilled two successful delineation wells in White Rose field, 350 km off the east coast of Newfoundland. On test, N-30 well in North White Rose field cut 145 m of pay and flowed 30 MMcfd of gas and 1,000 b/d of NGL. Husky pegs reserves at 150 million bbl of liquids and 2 tcf of gas. Well A-17 in South White Rose cut 114 m of pay and flowed 5,575 b/d; reserves are estimated at 250 million bbl. Additional delineation drilling is planned, beginning with North White Rose next year. Kvaerner SNC-Lavalin Offshore, St. John's, Newf., was awarded the concept screening study for the White Rose field development. Interests in the field are: Husky, 75%; Petro-Canada, 17.5%; and Norsk Hydro Oil & Gas, 7.5%.

Agip SPA

started gas production from Ivana A platform in the Adriatic Sea off Croatia. Ivana field, operated by the INAgip 50-50 venture of Agip Croatia BV and Croatian state oil company INA, is about 40 km west of Pola, Croatia, in 43 m of water. First-stage production from Ivana A is estimated at 25 MMcfd from five wells. Output is expected to plateau at 63 MMcfd in 2001 with the addition of four satellite platforms: Ivana E, D, B, and C. Ivana has reserves of 280 bcf. Overall field development costs are estimated at $190 million. The gas will be transported through a 67-km pipeline to the Garibaldi K platform in the Italian Adriatic Sea off Ravenna, where it will be compressed and sent to INAgip's Casalborsetti treatment plant.

Woodside Energy Ltd.,

Perth, announced first oil from the Laminaria-Corallina fields off northwestern Australia. The fields are being produced using the Northern Endeavor floating production, storage, and offloading vessel (OGJ, Oct. 25, 1999, p. 29). Interests in Corallina field are: Woodside, 50%; BHP Petroleum (North West Shelf) Pty. Ltd., 25%; and Shell Development (Australia) Pty. Ltd., 25%. Interests in Laminaria are: Woodside, 44.9%; BHP, 32.6%; and Shell, 22.5%.

Phillips Petroleum Co.

unit Phillips China Inc. drilled and tested a fourth successful well on a large anticline on Block 11/05 in China's Bohai Bay (OGJ, Oct. 4, 1999, p. 32). Well PL 19-3-5 was drilled to 6,094 ft TD and cut about 260 ft of net pay in the Minghuazhen and Guantao formations. Two limited-interval drillstem tests were conducted: the first yielded about 50 b/d of 13° gravity oil with a GOR of 125 scf/bbl; the second flowed 505 b/d of 17° gravity oil with a GOR of 112 scf/bbl. Phillips plans to drill three additional appraisal wells in the field and will spud PL 19-3-7 on the southeast flank of the field next week. It will spud PL 19-3-6 later in November.


Fina Resources Inc.,

a unit of TotalFina SA, signed an agreement with Gulf Canada Resources Ltd., Calgary, under which Fina will have the option to participate in the further development of Gulf Canada's Surmont oilsands project in northern Alberta and in its Kerrobert, Sask., heavy oil project (OGJ, June 28, 1999, p. 22). Fina's participation will include funding certain projects during the pilot phase; in return, it will earn an option to acquire a 50% working interest in either the Surmont commercial development project or in a combination of the Surmont and Kerrobert projects.


Numaligarh Refinery Ltd.

(NRL) in Assam state, India, will become fully operational by yearend, according to the refinery's general manager (OGJ, June 7, 1999, p. 27). Production from the 3 million tonne/year plant will comprise: LPG, 84 tonnes/day; naphtha, 510 tonnes/day; aviation turbine fuel, 85 tonnes/day; superior kerosine oil, 1,102 tonnes/day; high-speed diesel, 1,095 tonnes/day; petroleum coke, 71 tonnes/day; and sulfur, 4 tonnes/day.

India's Reliance Petroleum Ltd.

signed crude oil purchase contracts with producers in four Middle East countries. The contracts involve acquisition of 120,000 b/d each from Saudi Aramco and National Iranian Oil Co., and 30,000 b/d each from Kuwait Petroleum Corp. and Canadian Occidental Petroleum Ltd., which has production assets in Yemen. The oil will be processed at Reliance's 540,000 b/d refinery at Jamnagar, Gujurat (OGJ, Aug. 23, 1998, p. 42). The refinery is expected to be fully commissioned by yearend.


Petroquímica de Venezuela SA

(Pequiven) plans to expand the capacity of a fertilizer complex under construction at Jose, Veneuela. The $1.1 billion Fertinitro I complex, slated for start-up in fourth quarter 2000, will have capacity to produce 1.2 million tonnes/year of ammonia and 1.5 million tonnes/year of urea. The Fertinitro II project would have the same capacities and would start up in 2005. The two plants are part of Pequiven's world-scale, 10-year, $10 billion expansion plan. Fertinitro stakeholders are Pequiven (35%), Koch Industries Inc. (35%), Snamprogetti SPA (20%), and Empresas Polar CA (10%).

BASF and Sontrach,

the Algerian state oil firm, have agreed to form a joint venture for the production of propylene in Spain. The JV, to be called Propanchem SA, will build and operate a 350,000 tonne/year propane dehydrogenation plant at BASF's Tarragona complex. A 335-Mw cogeneration plant will be added to support the new propylene plant. Both plants are expected to come on stream early in 2002. Sonatrach will supply the propane feed, and Targor Iberia SA-a joint venture of BASF and Celanese AG-will use the propylene product to feed a 225,000 tonne/year polypropylene unit it is building at the Tarragona site. The new firm will be owned 51% by BASF and 49% by Sonatrach; European Union approval of the combine is awaited.



set up an agency to promote the reduction of greenhouse gases in the province, which produces 80% of Canada's oil and gas, as well as most of its emissions of greenhouse gases. Climate Change Central, with funding of $2 million/year (Can.), will have a goal of supporting business partnerships in projects that advance the emission-reducing cause, the government said. Industry would pay most of the cost of public-private partnership plans to cut emissions. The Pembina Institute, an Alberta environmental research group, said the government has underestimated the scope of the problem. It said funding of $30-$50 million/year is needed for an effective program.

Gulf Canada Resources Ltd.

says it will sell its 46.7% interest in Petrovera Resources, a heavy oil joint venture with PanCanadian Petroleum Ltd., Calgary. Petrovera, established last spring, produces about 34,000 b/d of crude oil. Gulf Canada estimates its share in the venture is worth $275-400 million (Can.). The producing properties straddle the Alberta-Saskatch- ewan border. They have estimated reserves of more than 100 million bbl. Proceeds from the sale would be used to reduce Gulf Canada's debt load to about $1.5 billion by yearend.


Woodside Energy Ltd.

and Energy Equity Corp. were named preferred providers of electricity to the West Kimberley region in the northern part of Western Australia. The state's energy minister said this week that the government would now negotiate a detailed power purchase agreement with the joint venture, which will provide power generated from natural gas produced on Australia's North West Shelf. The negotiated agreement will be compared with a "best deal" scenario presented by proponents of a controversial tidal power scheme for the region before a final recommendation is made to state cabinet.


KeySpan Corp.,

New York, and Eastern Enterprises, Boston, signed a definitive merger agreement under which KeySpan Energy will acquire all Eastern common stock for $64/share cash. The transaction, which creates the largest natural gas local distribution company (LDC) in the US Northeast, is valued at about $2.5 billion. Separately, Eastern increased its offer for Manchester, NH-based EnergyNorth Inc. by 30% to $61.13/share cash-thus valuing EnergyNorth's equity at over $200 million. The revision is contingent on completion of the KeySpan-Eastern merger. The deals are expected to close simultaneously in 9-12 months. KeySpan operates the two Brooklyn Union LDCs; Eastern operates Boston Gas Co., among other LDCs; and EnergyNorth is an energy services holding company that distributes natural gas and LPG in New England.

Midcoast Energy Resources Inc.,

Houston, will acquire Kansas Pipeline Co. and related entities, including the MarGasCo Partnership, for a combined $190 million in cash and debt assumption. The acquisition includes Kansas Pipeline's 1,120-mile interstate natural gas pipeline, which transports gas from Oklahoma and western Kansas to Wichita and Kansas City. The line interconnects with the Transok, Panhandle Eastern, and ANR pipeline systems. MarGasCo is a nonregulated company that markets gas shipped in the KPC pipeline.

Petroleos de Venezuela SA

plans to launch a crude and products trading business as part of "a drive to expand the range of its global commercial activities," it said. The new branch-to be called PDVSA Trading and based in Houston-will provide services for the sales and purchasing of crude and products to third parties; it is slated to begin business in January 2000.


plans to sell its 49.8% interest in Tyumen Oil Co. (TNK) by tender. It has set a minimum price of $185.3 million. An equally owned consortium of Russian financial group Alfa Bank and US group Access Industries/Renova holds the remaining 50.2% of the company. The existing shareholders have expressed an interest in acquiring the state's holdings, which they value at $200 million. The government had hoped to increase the price it received by drawing into the bidding BP Amoco PLC, which has been in a dispute with TNK over ownership of several production companies affiliated with Sidanko, in which BP Amoco is a stakeholder. BP Amoco is reportedly not interested. Results of the tender will be announced Dec. 22.

Gas marketing

TransCanada PipeLines Ltd.

signed a joint venture agreement with Sears Canada to supply residential customers in Ottawa with natural gas. The deal makes Sears the first national general retailer to offer natural gas. Starting in December, the JV's pilot program will target Ottawa markets; plans call for expanding to provide services nationwide. TransCanada will manage supply, transportation capacity, storage, and risk management for the Sears customers.

Alternate Energy

Enron Corp.

abandoned its plan to build a wind power generation station in the Tehachapi mountains north of Los Angeles (OGJ, June 7, 1999, p. 35). The proposed site was populated by California condors, an endangered species. In exchange for agreeing not to build on the original site, Enron received a lease on an alternative site 20 miles away.