INDUSTRY BRIEFS

Petrochemicals

Saudi Basic Industries Corp. will secure an $850 million loan from eight banks to help finance construction of the $1.9 billion Ibn Rushd project at Yanbu, Saudi Arabia. First project phase, a 140,000 metric ton/year polyester plant, came on stream last year. Next two phases, due on stream by early 1998, are a 350,000 ton/year purified terephthalic acid plant and a 730,000 ton/year aromatics plant. The latter will produce 350,000 tons/year of benzene, 300,000 tons/year of paraxylene, 450,000 tons/year of orthoxylene, and 35,000 tons/year of metaxylene.

Chinese Petroleum Corp. (CPC), signed a letter of intent with Taiwanese and Vietnamese partners to build a $35 million crude oil-based petrochemical plant in Viet Nam's Mekong Delta. Plant will produce a range of lubricants, liquefied petroleum gas, and other derivatives. CPC will hold a 45% stake in the venture, to be located in Can Tho Province, about 120 km from Ho Chi Minh City. Two other Taiwanese companies, Yi Jinn Industrial Ltd. and Technical Consultant Co., will hold 15% and 10% interests, respectively, with the remaining 30% being held by Vietnam's Can Tho Agricultural & Stocks Product Co.

Exports-imports

Germany's Wingas GmbH clinched a 20-year transit agreement with Distrigaz SA, Belgium, enabling Wingas to receive 35 bcf/year of gas from U.K. via the Interconnector pipeline being built from Bacton to Zeebrugge (OGJ, Nov. 25, p. 34). Wingas still needs transit deals for another 70 bcf/year of U.K. gas under existing contracts. Wingas hopes to begin receiving gas from Conoco (U.K.) Ltd. and British Gas plc on Oct. 1, 1998.

Pipelines

Asamera (Overseas) Ltd., the Indonesian unit of Gulf Canada Resources Ltd., Calgary, let a $33 million contract to Willbros Group Ltd., Tulsa, and partners to build pipelines, flowlines, and related facilities for the Corridor Block gas project in Sumatra. Partners in the group include Japan's JGC Corp. and Indonesian engineering company P.T. Pertafenikki.

Federal Energy Regulatory Commission (FERC) issued a proposed rule that would incorporate a second round of proposals by the Gas Industry Standards Board. The rule sets standards for business transactions for interstate gas pipelines and their customers, including procedures for placing relevant information on the Internet.

Koch Gateway Pipeline Co., a unit of Koch Industries Inc., Wichita, plans to increase its firm natural gas pipeline capacity by 150 MMcfd from Carthage to Perryville in East Texas. Expansion includes a mainline interconnect with Texas Gas Transmission Corp.; a new supply lateral from the Carthage hub; partial looping of Koch's 24-in. line between Carthage and Perryville; new Perryville area compression; and additional compression at Koch's Carthage Junction, Hall Summit, and Clarence compressor stations. Koch anticipates filing a FERC application early in 1997. Service is planned to start before winter 1998-99.

Federated Pipe Lines (Northern) Ltd., Calgary, filed an application with Canada's National Energy Board for a $40.8 million (Canadian) liquids pipeline between Taylor, B.C., and Belloy, Alta. The 106-mile, 10-in. line is scheduled for construction in summer 1997, with start-up scheduled for spring 1998. The line will have an initial delivery capacity of 52,000 b/d.

Coastal Corp. unit ANR Pipeline Co. and Consumers' Gas Co. Ltd., Toronto, said gas is now flowing on the Link international pipeline system between the U.S. and Canada. Initial capacity is 150 MMcfd. System consists of the 12-mile, 24-in. ANR Link from its Muttonville lateral at St. Clair, Mich., to the international boundary on the St. Clair River and the 6-mile, 24-in. Link pipeline operated by Consumers' Gas unit Niagara Gas Transmission Ltd. from the international boundary to the Consumers' Gas Tecumseh gas storage complex.

Williams Natural Gas Co., a unit of Williams Cos. Inc., Tulsa, completed a $13.7 million pipeline expansion in Southwest Missouri to meet growing demand by the city of Springfield, Mo. Work included laying a 28.2-mile, 20-in. extension, paralleling an existing 16-in. line. Springfield committed to an additional 23 MMcfd of capacity for a total of 125 MMcfd of capacity on the Williams line.

Canada's Transportation Safety Board said high water levels and a shifting riverbed were contributing factors in a natural gas pipeline explosion near Winnipeg last spring. The pipeline section under the La Salle River is part of the transcontinental pipeline system operated by TransCanada PipeLines Ltd., Calgary. The company has since examined other river crossings in its system in Manitoba but did not find similar problems. It plans to examine all river crossings in its system in 1997. Initial reports said stress corrosion cracking near a weld joint was a factor. TSB said only one of six pipelines running under the river at the crossing point was cracked.

Refining

Ceska Rafinerska AS, a unit of Unipetrol AS, shut down its refinery at Litvinov, Czech Republic, after an explosion and fire erupted in a pumping station Nov. 23. Leaking fuel from two storage tanks fed the fire, which injured three firemen. Although the plant was not damaged, shutdown was required because the leaks could not be stopped, officials said. To compensate for indefinite closure, production will be stepped up at the Czech Republic's other plant at Kralupy, north of Prague. A government assessment indicated short term gasoline supplies would be adequate.

U.K. Health & Safety Executive (HSE) is prosecuting Texaco Ltd. and Gulf Oil (Great Britain) Ltd. over an explosion and fire at Pembroke refinery, South Wales, in July 1994 (OGJ, Aug. 1, 1994, p. 25). Twenty-six people were injured by the blast, none seriously. HSE said the companies face charges of contravention of the 1974 Health & Safety at Work Act and of failing to ensure safety of employees, subcontractors, and the public. The case was to be heard at Swansea Crown Court, South Wales, beginning Nov. 22.

Drilling-production

BHP Petroleum Pty. Ltd. is discussing with partners sale of its 43.75% interest in Dai Hung oil field off southern Viet Nam after writing off its $120 million (Australian) investment in development. Move comes after BHP unsuccessfully tried to renegotiate its production-sharing contract for the permit with state-owned Petrovietnam, prompted by a reserves estimate slashed to 150 million bbl from the original 800 million bbl. Production averages 13,000 b/d. Other interests are held by Petrovietnam 15% and Total and Sumitomo 10.625% each.

Pogo Producing Co., Houston, signed a memorandum of understanding with the Petroleum Authority of Thailand for sale and purchase of crude and condensate from Tantawan field in the Gulf of Thailand (OGJ, Mar. 11, p. 33). Tantawan liquids sales will begin in 1997 at posted world prices. A year-to-year contract calls for monthly tanker shipments of blended crude and condensate. Tantawan will use a floating production, storage, and offloading system.

Maersk Victory jack up, owned by Maersk Drilling, Copenhagen, sustained major damage when one of its legs broke through soft seabed limestone in St. Vincents Gulf off South Australia. The incident happened while the rig was jacking up on location prior to spudding the first of two wells in the Stansbury basin on exploration permit PEL 53 for Canyon Australia, a unit of Wagner & Brown Ltd., Midland, Tex.. Prior to presstime, the rig was leaning with part of its deck in the water. All personnel were evacuated safely. Rough seas have hampered salvage operations, estimated at $13 million (Australian). Oil spill response crews were on standby in case fuel oil drums on the rig's deck rupture.

Norway's Den norske stats oljeselskap AS (Statoil) expects this week to begin an extended well test in Aasgard fields off central Norway. Transocean Searcher semisubmersible will be used to produce as much as 100,000 bbl of oil, to be taken to market in two loads by Crystal Sea well test ship. The well to be tested is on Block 6506/12 Smoerbukk field, one of three finds being developed by Statoil under its Aasgard project (OGJ, Aug. 19, p. 50).

Russian joint venture company Geoilbent Ltd. secured a $55 million loan from European Bank for Reconstruction & Development (EBRD), London, to speed development of North Gubkinskoye and Prisklonovoye oil fields in western Siberia. EBRD said the fields have total estimated reserves of 300 million bbl of oil and are expected to yield a combined 75,000 b/d. A $329 million development will involve drilling 300 wells and expanding existing export infrastructure. Geoilbent partners are Benton Oil & Gas Co., Ventura, Calif., 34% and Purneftgas and Purneftegasgeologia 33% each.

Amoco (U.K.) Exploration Co. started production from Arkwright oil field on U.K. North Sea Block 22/23a. First oil was produced on Nov. 17, and output is expected to exceed 12,000 b/d. Arkwright was developed as a subsea satellite of Amoco's Arbroath platform about 7 miles away at a cost of £55 million ($82.5 million).

Ensco International Inc., Dallas, completed the $42-45 million acquisition of the Friede & Goldman L-780 MOD II design Miss Clementine jack up, rated to 25,000 ft in 300 ft of water. Rig, currently in Southeast Asia, will remain there for now. That purchase, along with mobilization in early 1997 of the Ensco 97 jack up, rated to 25,000 ft in 250 ft of water, to the Middle East from the Gulf of Mexico, will increase Ensco's Asia-Pacific fleet to seven premium jack ups.

Marine Drilling Cos. Inc., Houston, entered into an agreement with Odfjell Drilling of Norway to acquire the Chris Chenery, a second-generation semisubmersible rated to work in 600 ft of water. The $38 million acquisition represents Marine Drilling's entry into the deepwater drilling sector. The rig, to be renamed Marine 500, is idle in Singapore. Various deepwater upgrade options are under consideration. Closing is subject to inspection of the rig. Delivery is expected within 60 days.

Companies

Statoil and Norsk Hydro AS agreed to exchange interests in a number of North Sea licenses. Hydro will take 3% in Blocks 34/7 and 34/8, increasing its share in each to 21%. Block 34/8 contains Visund discovery, currently being developed by Hydro. In return, Statoil will take an 8% share of Block 15/5, increasing its share to 58%, plus an undisclosed cash sum. Statoil will take over from Hydro operatorship of Block 15/5, which holds oil and gas development prospects.

Witco Corp., Greenwich, Conn., closed sale of three lubricants businesses to separate buyers for about $121 million. Sun Co. Inc. purchased Kendall/Amalie unit; Exxon Co. U.S.A. purchased Southwest Petro-Chem Inc.'s grease unit; and Stant Corp., Richmond, Ind., purchased Southwest's LubriMatic and private label equipment business. Discussions are under way on sale of Witco's remaining lube units, Golden Bear naphthenic oils and asphalt unit and refinery; Bradford, Pa., refinery and blending/packaging operations; and Omaha and Jacksonville lubricant blending/packaging operations.

Pembina Resources Ltd., Calgary, made a deal for a $110 million (Canadian) takeover of Serenpit Inc., Calgary. Pembina will pay $4.80 for each Serenpit share, about 14% above recent trading prices. Serenpit's board and management agreed to sell their 30% interest.

Exploration

Colombia's state-owned Empresa Colombiana de Petroleos (Ecopetrol) signed contracts with a unit of Canadian Occidental Petroleum Ltd., Calgary, to explore the Paramo Este and Oeste blocks in the Putumayo basin. Contracts provide for reprocessing existing seismic and acquiring 200 km of new seismic for 2 years, with an option for exploratory drilling in the third year. CanOxy holds a 100% interest in the blocks, which cover 575,000 acres and adjoin the Troyano block, in which it acquired a 50% interest (OGJ, Aug. 26, p. 21).

Carigali-Triton Operating Co., owned by Triton Energy Ltd., Dallas, and Malaysia's Petronas Carigali (JDA) Sdn. Bhd., disclosed 1 Bumi on Block A-18 in the Gulf of Thailand flowed on test at the highest rate of any gas well drilled so far on the block (OGJ, Nov. 18, p. 26). Well, about 9 miles east of Cakerawala field, flowed 73 MMcfd of gas and 305 b/d of condensate from six intervals at 3,514-7,676 ft through 3/8-2 in. chokes with 188-3,902 psi flowing tubing pressures. Well opened the block's fourth major gas field. Phase 1 development calls for initial production of 300 MMcfd from Cakerawala in 1999. A gas sales agreement is being negotiated with Petronas and Petroleum Authority of Thailand.

Indo-Pacific Energy Ltd., Wellington, N.Z., plans to spud 1 Kereru wildcat on the Kereru prospect on its 70%-controlled 775,000-acre PEP 38328 permit in New Zealand's East Coast basin, about 25 miles west of Napier, in the Hawke Bay region of North Island. Indo-Pacific will manage drilling and testing on behalf of a joint venture that includes Moondance Energy Ltd., Australia, and Croft Oil & Gas plc., U.K. PEP 38328 area is lightly explored, with only three exploratory wells drilled previously, all prior to 1971.

Courts

A South Texas jury awarded Tennessee Gas Pipeline Co. $143 million in damages stemming from a lawsuit against KCS Resources Inc., Houston. Tennessee claimed KCS injected propane into gas sold during November 1993-November 1994 to enrich the gas stream. The jury found KCS committed fraud and breached a 20-year contract, requiring Tennessee to buy KCS-produced gas from a Bob West field lease in Zapata County at a price substantially above current market prices; Tennessee could reject any gas containing less than 1,000 BTU/Mcf. Tennessee claimed KCS increased production but gas did not meet specifications. KCS said it will seek to have the verdict set aside, file a new trial motion, or appeal.