INDUSTRY BRIEFS

Petrochemicals

Chevron Chemical Co. and Saudi Industrial Venture Group formed a 50-50 venture to build and operate a $650 million petrochemical complex at Al-Jubail, Saudi Arabia. Construction of a 480,000 metric ton/year benzene plant and 200,000 ton/year cyclohexane plant is scheduled for completion in mid-1999. The complex will use Chevron technology to manufacture benzene from a natural gasoline feedstock supplied by Saudi Aramco and Institut Francais du Petrole technology to manufacture cyclohexane from the benzene.

Huntsman Corp., Salt Lake City, and Enron Liquid Services Corp., a unit of Enron Corp., Houston, increased design capacity of their proposed joint venture ethylene plant to 1.75 billion lb/year from 1.5 billion lb/year. Selection of engineering and construction contractors is set for this quarter, with a fourth quarter 1999 expected start-up. Favored location is Port Arthur, Tex.

Farmland Industries Inc. Kansas City, Mo., and TXP Syngas Supply Co., Texas City, Tex., will conduct a joint study on the economics of building North America's first coke gasification-to-ammonia plant next to Farmland's Coffeyville, Kan., refinery. The plant would combine Texaco Inc. gasification technology with air separation technology developed by Praxair Inc., Danbury, Conn., to convert petroleum coke into synthesis gas and nitrogen, which Farmland then would process into anhydrous ammonia. TXP is a 50-50 partnership of Texaco and Praxair.

Gas storage

American Natural Resources Co. (ANR), Detroit, a unit of Coastal Corp., acquired from Primark Corp., Waltham, Mass., eight underground gas storage sites, related pipelines, and compression near Big Rapids, Mich. The fields provide about 77 bcf of working storage capacity and 1.4 bcfd of deliverability. Transaction involves Austin, Norwich, Goodwell, Reed City, Loreed, Orient, North Hamilton, and Lincoln-Freeman storage sites. Affiliate ANR Pipeline Co. leases capacity from and operates the fields.

Exploration

Japan National Oil Corp. (JNOC) signed an agreement with Kazak hstan for exclusive rights to explore for and develop oil in two Kazakh regions for 5 years beginning fiscal 1998. JNOC will spend about $90 million to determine viability of finding and developing about 1 billion bbl of reserves in the region. The agreement gives Japanese refiners priority on any crude produced and could lead to the first independent development of major central Asian hydrocarbon resources by Japanese firms.

Saga Petroleum AS found oil and gas on Norwegian North Sea Block 34/7 near Tordis field. The well flowed on test 6,604 b/d of oil and 3.7 MMcfd of gas through a 40/64 in. choke. The 34/7-25S well was drilled in 187 m of water. Saga is considering development of the find by subsea tieback to Tordis, itself a subsea satellite of Gullfaks field.

Apache Corp., Houston, found oil on its Qarun concession in Egypt's Western Desert. The 1X SW Qarun wildcat, about 3 miles southwest of Apache-operated Qarun "A" field, opened the SW Qarun pool. The Kharita zone flowed on test at a rate of 2,600 b/d of 40° gravity crude through a 1 in. choke at 58 psi flowing tubing pressure from perforations at 9,933-53 ft. The Lower Bahariya zone flowed on test at a rate of 1,100 b/d of 36° gravity crude through a 1 in. choke at 44 psi flowing tubing pressure from perforations at 9,160-9,350 ft. Interests are operator Apache 75% and Global Natural Resources Inc. 25%.

Sonangol, Angola's state-owned oil company, awarded an offshore production sharing contract to operator Amoco Angola BV and 50-50 partner Shell Exploration & Production Angola BV. Work involves exploration and development in as much as 1,700 m of water on Block 18, covering 5,000 sq km about 75 km northwest of Luanda. Exploratory drilling is planned in late 1997 or in early 1998 on the block, where 3D seismic has been acquired.

Gas processing

Westcoast Energy Inc., Vancouver, B.C., slated capital spending of more than $100 million (Canadian) for gas processing projects in Northeast British Columbia. The $47 million, 80 MMcfd Highway plant will be built 75 miles northwest of Fort St. John, B.C. by next May. Westcoast also will spend $60 million to double capacity to 140 MMcfd of the Jedney plant 112 miles north of Fort St. John. It is under construction and will begin processing 70 MMcfd in November.

Drilling-production

British-Borneo Petroleum Syndicate plc disclosed test results of an appraisal of Morpeth discovery on Ewing Banks Blocks 921, 964, and 965 off Louisiana in the Gulf of Mexico. The well flowed 6,000 b/d of 32° gravity oil and 6.5 MMcfd of gas through a 26/64 in. choke with flowing tubing head pressure of 5,300 psig. British-Borneo plans to develop Morpeth using a SeaStar design tension leg platform (OGJ, Sept. 30, p. 36). The company plans to make the final development decision at yearend, with a view to first production in summer 1998.

Abraxas Petroleum Corp., San Antonio, closed its $47.5 million acquisition of properties in Wyoming's Green River basin from Enserch Exploration Inc., Dallas. The properties, in the Wamsutter area, consist of 14,091 net acres and 23.25 net wells that produced an average of about 860 bbl of crude oil and 12.8 MMcfd of natural gas in the first half.

Shell Offshore Inc., New Orleans, signed a letter of intent with Helmerich & Payne International Drilling Co. for a 3 year contract to design, build, and operate a $30 million drilling rig. Rig 204 will be installed on Shell's Ursa tension leg platform to develop Ursa field in about 4,000 ft of water in the Gulf of Mexico. Drilling is expected to begin in fall 1998.

European Bank for Reconstruction and Development approved a 36 month nonrecourse project loan of as much as $55 million for Geoilbent Ltd., a venture of Benton Oil & Gas Co., Carpinteria, Calif., Purneftegas, and Purneftegasgeologica. Loan proceeds and cash flow will be used to further develop North Gubkinskoye and Prisklonovoye fields in western Siberia. Geoilbent estimates Gubkinskoye oil reserves at 300 million bbl.

Norsk Hydro AS let a $41.6 million contract to Saipem U.K. Ltd. for transport and installation of a platform jacket and deck in 160 m of water on Block 30/6 to develop Oseberg East field, 150 km west of Bergen and 27 km northeast of Oseberg field center. Contract involves detail engineering, coordination, barge transport, and platform installation in May-June 1988. Saipem's 7000 crane barge will be used to install the jacket and deck, each weighing about 8,800 tons. Two wells will be drilled before production starts in October 1998. Oil reserves are estimated at 145 million bbl.

Global Marine Inc., Houston, will spend about $160 million converting the Glomar Explorer scientific research vessel into a deepwater drillship. The company launched the conversion to carry out a 5 year, $260 million commitment from Chevron Corp. and Texaco Corp. to drill in the Gulf of Mexico in water as deep as 7,500 ft. Once converted, the Glomar Explorer will be the largest drillship in operation. Orginally designed and built for the U.S. government by Global Marine in the early 1970s, the ship will resume operation after conversion in first quarter 1998. Glomar signed a 30 year lease with the U.S. Navy to use the vessel.

Newfield Exploration Co., Houston, paid $21 million for Chevron U.S.A. Inc.'s 75% working interest in the Ship Shoal 69 field off Louisiana in the Gulf of Mexico. The field currently produces about 1,900 b/d of oil and 7 MMcfd of natural gas from 9 wells. The platforms and facilities are in 30 ft of water about 85 miles southwest of New Orleans. Newfield is now field operator.

Natural gas flaring in India fell to only 7.45% of production in fiscal 1995-96 from 38.33% in 1985-86. At least 159 MMcfd is being flared in the country. Of this, state-owned Oil and Natural Gas Commission accounts for almost 135 MMcfd.

Environment

U.S. Justice Department and Environmental Protection Agency reached settlement for cleaning the Bridgeport Rental & Oil Services toxic waste site in Logan Township, N.J. Under the deal, more than 90 companies, federal, and state agencies will contribute $221.5 million to clean the location, which was used as a waste oil collection and chemical waste storage site for nearly 30 years. Justice said it still has a 13 acre lagoon containing a "toxic soup" of waste materials.

Pipelines

West Australian Petroleum Pty Ltd., Perth, put its 415 km Dongara-Pinjarra gas pipeline up for sale, along with its permits in the Dongara region in Australia's Perth basin. The pipeline, believed to have a replacement cost of $130 million (Australian), was the sole transporter of gas to Perth prior to discovery and development of the North West Shelf fields. The line can carry as much as 123 MMcfd with extra compression.

B.C. Gas Utility Ltd., Vancouver, B.C., seeks to lay a $300 million (Canadian) natural gas pipeline from Alberta to Vancouver. The company filed with the province's utilities commission for a $650,000 study of the proposed Southern Crossing pipeline. The 186 mile first phase would extend from Yahk to Oliver, B.C., a second phase to Vancouver. B.C. Gas says the project would make gas users less dependent on supplies from northern British Columbia, now delivered by Westcoast Energy.

Shell Petroleum Development Co. of Nigeria Ltd., under an existing associated gas gathering contract to supply Aluminum Smelter Co. of Nigeria Ltd., awarded conceptual design work to ABB Lummus Global, Bloomfield, N.J. Work involves optimization of design, enhanced specifications for the Soku gas plant, and preparation of bid packages for gas plants and pipelines (OGJ, Sept. 16, p. 27). Project objective is to fully utilize associated gas from nine flow stations in the Alakiri and Obigbo North areas to eliminate gas flaring in affected fields.

Chinese Petroleum Corp., Taipei, let a $20 million contract to Tenneco Energy, Houston, and partner CTCI Corp., Taipei, to design Taiwan's first offshore gas pipeline. The 190 mile pipeline will transport gas from the Yung-An liquefied natural gas receiving terminal on the southern end of the island to markets in the north. Construction is to begin in 1998, with start-up set for 1999.

U.S. Federal Energy Regulatory Commission received from the gas pipeline industry 43 proposed business practice standards for pipelines for possible addition to 140 standards that it required in a July 17 order (OGJ, July 29, p. 44). The Gas Industry Standards Board submitted the standards, which were ratified by member pipelines. GISB is working on additional issues such as title transfer tracking and model operational balancing agreements.

Gas Research Institute and Gaz de France are cosponsoring a $580,000 program to adapt magnetic flux leakage (MFL) technology for inspections of "live" operating gas distribution mains. Next year they plan to field test a prototype MFL inspection system that would detect metal loss in pipelines without requiring them to be excavated and inspected. A commercial product would be introduced in 1998.

Refining

Petrotrin, Trinidad's state oil company, started up the expanded fluidized catalytic cracking unit at its Point-a-Pierre refinery. The cat cracker is a central element in a $335 million upgrade that will raise the refinery's capacity from 100,000 b/d to 160,000 b/d. All work is planned for completion by December. The upgrade was delayed by a fire that damaged a hydrotreater Sept. 20. Repairs should be completed in a few weeks. The upgrade also includes new hydrogen, sulfur recovery, and methyl tertiary butyl ether units.

Koch Refining Co. LP, Wichita, selected Bechtel Corp., Houston, as an alliance partner to provide construction and management services for its Corpus Christi, Tex., refinery. Beacon Construction, a Bechtel subsidiary, will build small capital projects and provide maintenance and turnaround services.

Companies

Santos Ltd., Adelaide, Australia, paid $46 million (Australian) for the oil and gas business of MIM Holdings Ltd. The acquisition includes a 20% interest in Papua New Guinea permit PPL 56, a 33.33% interest in the Bentu production sharing contract gas development in central Sumatra, a 66.66% interest in PEP 38712 permit in the Taranaki basin off New Zealand, and a 30% and 20.83% interest, respectively, in WA-208-P and WA-258-P exploration permits in the Carnarvon basin off Western Australia. The portfolio contains an estimated 16.8 million bbl of oil equivalent, including 5.8 million bbl of oil reserves.

Premier Oil Plc, London, bid 70¢(Australian)/share to take over Discovery Petroleum NL, Perth, valuing the Australian company at $92 million. Discovery rejected the offer as insufficient. Discovery has oil production from Mt. Horner field and gas production from Beharra Springs field, both in the Perth basin of Western Australia.

Terminals

Total Energy Corp., White Plains, N.Y., signed an agreement with Wyatt Energy Inc., New Haven, Conn., for joint development of a products terminal in New Haven harbor. The proposed $5-6 million terminal would include 24 tanks with a total storage capacity of 2.16 million gal. Permit approvals are expected in spring 1997, with construction slated for completion before the 1997-98 heating season.

Copyright 1996 Oil & Gas Journal. All Rights Reserved.