Gas processing
Enron Corp. was chosen to negotiate with state owned Petrovietnam to jointly develop, own, and operate a $161 million, 96 MMcfd gas processing plant south of Ho Chi Minh City in Ba Ria-Vung Tau province. Under a heads of agreement, Enron is to hold a 49% interest and Petrovietnam 51% in the project. Petrovietnam will deliver gas to the plant from Bach Ho oil and gas field off southern Viet Nam. Dry gas will be sold for power generation and industrial use domestically and condensate and natural gas liquids sold locally or exported through a terminal that is also part of the project.
Amoco Corp. will build a 400 MMcfd, $80 million cryogenic gas processing plant in Grant County, Kan., near Williams Natural Gas Co.'s Hugoton station in time for start-up by first quarter 1998. The plant will recover essentially all liquids from the gas stream and about 80% of the ethane, while stripping 98% of the helium and cutting nitrogen to about 3% from 14-17%. The plant's processing technology eliminates a need for water.
LNG
Japan may join a Sino-Russian government proposal to jointly develop Kovyktinskoye gas field near Irkutsk, eastern Siberia, in support of a possible liquefied natural gas export project. Japanese officials said the project would require an investment of 1 trillion yen ($9 billion) to develop a gas resource believed capable of supporting LNG exports totaling 400-600 million metric tons.
Thailand and Oman signed a memorandum of understanding calling for Oman to sell Thailand 2 million tons/year of LNG in a deal intended to get Oman's LNG export project off the ground. The contract, along with a 4 million ton/year deal with South Korea's Korea Gas Corp., covers 90% of the project's 6.6 million ton/year capacity. Oman also agreed to sell Thailand crude oil. Oman's foreign partners in the project include Royal Dutch/Shell and Total.
Spills
Exxon Corp. won a $250 million Houston jury verdict resulting from its lawsuit against Lloyds of London over unpaid insurance claims related to Exxon's $2.5 billion cleanup of the 1989 Exxon Valdez oil spill off Alaska. Lloyds plans to appeal the verdict, if the court accepts the judgment following a June 27 hearing. Still to be decided in a separate trial are allegations of bad faith against Lloyds that could triple the final award if Exxon prevails there as well.
Environment
U.S. Environmental Protection Agency updated its Outer Continental Shelf air quality consistency requirements off southern California, meshing its rules with those of coastal counties and air pollution control districts.
Government
U.S. Minerals Management Service
proposed a rule to simplify its unitization rules for oil and gas leases on federal land. It plans to drop the model unitization agreements in current regulations. MMS also plans to produce shorter, more readable environmental impact statements it prepares for individual lease sales. It said the newer documents will be at least 25% shorter than the old ones.Petrochemicals
Taiwan's Chinese Petroleum Corp. (CPC) is searching abroad for a site to build its proposed naphtha cracker based petrochemical complex, citing increasing difficulties in building in Taiwan. A group of officials from CPC and 13 other companies involved in the project will visit sites in Singapore, Indonesia, Malaysia, and several undisclosed Middle East countries. Capital budget for the project is $5.45 billion, but CPC says that could rise to more than $7.27 billion.
Taiwan's Council for Economic Planning and Development (CEPD) took steps to end Taiwan's ban on imports of fuel oil and permit establishment of private refineries. The move will end CPC's long monopoly on fuel sales in Taiwan. CEPD also recommended CPC follow international practice and offer higher discount rates to its larger customers than its current ceiling of about 8%.
CPC and Lee Chang Yung Chemical Industries (LCYC), Taipei, agreed to invest $600 million in a Qatari petrochemical project. It will produce 825,000 metric tons/year of methanol and 610,000 tons/year of methyl tertiary butyl ether beginning early in 1999. The two Taiwanese companies and Canada's International Octane Ltd. (IOL) will replace France's Total, which disclosed its withdrawal from the project June 9. Interests now will be held by Qatar General Petroleum Corp. 50%, CPC 20%, and LCYC and IOL 15% each.
PT PENI, an Indoensian polyethylene producer owned 51% by BP Chemicals Ltd., signed a long term contract to buy ethylene from the nearby PT Chandra Asri petrochemical complex in Indonesia. Chandra Asri will supply half of PT PENI's ethylene feedstock needs through a 15 km pipeline linking their two plants. PT PENI Is building a third reactor train to hike plant capacity to 450,000 metric tons/year from 250,000 tons/year by yearend 1997. BP said another 100,000 tons/year capacity could be added by debottlenecking if demand continues to rise.
Appryl, a venture of Elf Atochem 51% and BP Chemicals Ltd. 49%, will build a 300,000 metric ton/year polypropylene plant at Grangemouth, Scotland. It will use Appryl technology to produce copolymers and homopolymers. Construction will begin in 1997, with start-up slated for 1999. The venture operates two other petrochemical plants in France.
Exxon Chemical Co. let contract to Brown & Root Inc., Houston, to build a propylene concentration unit at its Baytown, Tex., petrochemical complex. The new unit will upgrade dilute propylene produced from Exxon refining and chemical operations into chemical grade propylene. When complete in mid-1997, the new unit will increase Exxon's Baytown propylene capacity by 570 million lb/year to more than 2.6 billion lb/year. Construction will begin in mid-1996.
Exploration
Ranger Oil Ltd., Calgary, 4/31-1-3 discovery well on Block 4 off Angola flowed 7,400 b/d of 41 gravity oil and 13.3 MMcfd through a 48/64 in. choke from a single Tertiary zone. Although the well was designed to also probe Pinda sands, which contained oil shows, the Pinda was not tested. The hole was drilled to 15,800 ft and suspended. The Omega semisubmersible rig will move 10 km northeast to drill the 4/22-1-1 wildcat on a separate Tertiary structure with multipay potential. Plans also call for a 3D seismic survey to begin on the block soon. Interests are operator Ranger 49%, BHP Petroleum Pty. Ltd. 31%, and state owned Sonangol UEE 20%.
Pipelines
IPL Energy Inc., Calgary, plans to lay a 75 mile, $50 million crude oil pipeline from Stockridge, Mich., to Toledo, Ohio. The line will transport medium and low gravity crudes from western Canada to BP Exploration & Oil Inc.'s 110,000 b/d Toledo refinery. The 16 in. line will have initial capacity of 85,000 b/d, expandable to 110,000 b/d. BP plans a revamp at the Toledo refinery to handle heavier crudes. The project hinges on approval of second phase expansion of the IPL/Lakehead pipeline system to deliver another 170,000 b/d of Canadian crude to the Chicago area.
Alyeska Pipeline Service Co., Anchorage, let contract to John Wood Group, Aberdeen, for service on 100 gas turbines in 11 pump stations on the Trans-Alaska Pipeline System (TAPS). Alyeska recently took steps to place two TAPS pump stations on standby due to declining Alaskan North Slope oil production (OGJ, June 10, p. 30).
Russia's Transneft let contract to British Gas Pipeline Integrity International Ltd. to supply in-line inspection technology to help Transneft maintain its transmission system consisting of more than 49,000 km of line stretching 3,000 km east of Moscow into neighboring republics.
Research
Gas Research Institute, Chicago, asked the U.S. Federal Energy Regulatory Commission to approve a reduced budget of $170.4 million for 1997, down $4.4 million from its amended 1996 budget. GRI's new budget earmarks $123.4 million to continue 126 research and development projects and $15 million for new projects. GRI, which operates on gas transportation surcharges that FERC regulates, has been cutting its budget and staff (OGJ, Feb. 26, p. 36).
Drilling-production
Japan Petroleum Exploration Co. (Japex), Tokyo, signed a production sharing contract with Oman's government to develop Block 35 in the Montasaru area near the Oman-Saudi Arabia border. Prospective reserves are estimated at 100 million bbl of oil. Seismic surveys will get under way in 1997, with two wildcats slated for 1998. Japex, whose Japex Oman unit is producing 10,000 b/d from Oman's Waji Aswad Block 5, is seeking participation by other oil companies in the project.
Enserch Exploration Inc., Dallas, and partners suspended drilling in Allegheny field in the Gulf of Mexico to evaluate well data after 1 Allegheny appraisal well on Green Canyon Block 297 cut more than 350 ft of gross pay at 12,000-14,000 ft measured depth, extending the field 3,000 ft south. Enserch is moving Diamond Offshore's Ocean Voyager semisubmersible, which drilled the Allegheny well in 3,300 ft of water, to its Cooper project location in about 2,000 ft of water on Garden Banks Block 387. There it will spud a well July 1 to test a lower Pleistocene objective at 18,500 ft MD (OGJ, Jan. 22, p. 16).
Elf Aquitaine started up Nkossa oil field off Congo. Production, treatment, and oil storage facilities went on stream only 45 days after arrival of the field's massive floating production barge (OGJ, Apr. 15, p. 26). Production is expected to build to 120,000 b/d of 40 gravity oil and 1,300 metric tons/day of liquefied petroleum gas, with LPG output slated to begin in November.
Chevron U.K. Ltd. plans to drill a 16,500 ft extended reach well from Ninian South platform on U.K. North Sea Block 3/8a to develop the nearby Columba B reservoir. Columba B, planned as the fifth satellite of the aging Ninian field complex, holds about 10 million bbl of oil. Chevron also will appraise two other Ninian area satellites on Block 3/3, east of Ninian Central platform. Chevron said a well will be drilled on the 3/3-8 discovery later this year, while appraisal of Columba's E reservoir is to begin next year.
Talisman Energy Inc., Calgary, completed purchase of interests off Norway and the U.K. from British Petroleum Co. plc. Talisman acquired interests of 54.75% in a block in Ross oil field and 50.67% in an adjoining block in the U.K. North Sea and 48% in a block containing Asgard gas field off Norway. Talisman and BP will spend about $350 million (Canadian) to develop Ross, with production to start by mid-1998 and reach 40,000 b/d.
Gas storage
Alberta Energy Co. Ltd., Calgary, will add 5 bcf of gas storage capacity to its AECO C Hub in southern Alberta. The site's storage capacity will be increased to 93 bcf from 88 bcf and could be further expanded to 113 bcf. Its gas withdrawal rate is to increase to 2.3 bcfd from 1.8 bcfd. Construction is to be complete Oct. 31.
Companies
Conoco Inc. and Phillips Petroleum Co. agreed to end talks on the possibility of combining their U.S. refining, marketing, supply, and transportation assets. The companies said they could not agree on "significant commercial issues." They disclosed the talks last month (OGJ, May 20, p. 29).
Sweden's biggest oil company, Preem Petroleum AB, formerly OK Petroleum AB, will split into Svenska Petroleum Exploration AB upstream and Preem Petroleum AB downstream. The two companies will be controlled through Corral Petroleum Holdings AB, an umbrella firm used by owner Mohammed Al-Amoudi to buy OK for $750 million in 1994 (OGJ, Apr. 11, 1994, p. 108).
U.S. Justice Department agreed to let Smith International Inc., Houston, acquire Anchor Drilling Fluids of Norway if Smith sells Anchor's U.S. drilling fluids operations. Smith is the majority owner of M-I, the largest drilling fluids company in the world and one of three firms that dominate the business. Anchor is the fourth largest producer and distributor of drilling fluids in the U.S.
BJ Service Inc., Houston, won a bidding war with a $788 million (Canadian) offer for Nowsco Well Service Ltd., Calgary. Nowsco's board recommended the BJ offer of $35/share over an offer of $30.90/share by Great Lakes Chemical Corp., West Lafayette, Ind. (OGJ, May 27, p. 23).
Refining
YPF SA and partners Repsol SA and Mobil Corp., among others, were top bidders to buy a 60% interest in Peru's 102,000 b/d La Pampilla refinery at Lima for $180.5 million. The auction was part of the government's initial privatization of state petroleum company Petroleos del Peru.
Copyright 1996 Oil & Gas Journal. All Rights Reserved.
