General Interest INDUSTRY BRIEFS

Pipelines

A group planning a $3 billion (Canadian), 800 MMcfd-1.2 bcfd gas pipeline from Northeast British Columbia to the Chicago area says the project is on track to seek regulatory approval in the U.S. and Canada in about 1 year (OGJ, Dec. 25, 1995, Newsletter). Crestar Energy Ltd., Calgary, one of 21 backers of the 1,864 mile line, said a 3 month study shows the project is economic. It calls for leaving propane/ethane in the gas, then selling it in the Midwest or shipping it to Gulf Coast petrochemical plants.

TE Products Pipeline Co. LP (Teppco), Houston, by yearend expects to complete a 50,000 b/d expansion of main line capacity on its system serving Southeast Missouri and southern portions of Illinois, Indiana, and Ohio. Plans include adding pump horsepower at six sites on Teppco's 16 in. line between El Dorado, Ark., and Seymour, Ind. Teppco in December 1995 completed a 12,500 b/d expansion of its products pipeline system.

Exploration

Chevron Overseas Petroleum (Peru) Ltd.
issued a letter of intent to Grant Geophysical Inc., Houston, for a 500 line km, 2D seismic survey on Chevron's Block 52 in Peru. Plans call for Grant to begin collecting data with heliportable crews in April and complete the survey this year.

India's ONGC-Videsh agreed to participate with British Gas plc in exploring Block 38 off Yemen's Socotra Island. The deepwater block covers about 17,700 sq km. Plans call for seismic surveys and four wells in a two phase, $20 million program. The 1 Rukh wildcat, slated for spudding at the end of last month, is the deepest water project undertaken by India's state owned Oil & Natural Gas Commission, of which ONGC-Videsh is the international upstream arm.

Refining

Chevron U.S.A. Products Co. began replacing a reactor in the fluid catalytic cracking unit at its 258,000 b/cd El Segundo, Calif., refinery in a $75 million project aimed at improving FCCU reliability and increasing time between turnarounds. Jacobs Engineering Group Inc., Pasadena, Calif., is providing engineering, procurement, and construction support for the project.

TransCanada PipeLines Ltd. dropped plans to buy a 50% interest in a 75,000 b/d refinery owned by Farmland Industries Inc., at Coffeyville, Kan. (OGJ, Dec. 18, 1995, p. 39). TransCanada said the deal did not meet its criteria after a financial due diligence study.

Companies

Landmark Graphics Corp. and Western Atlas Inc., both of Houston, signed a letter of intent to form an alliance to develop and market oil field exploration and production software in a deal expected to close by the end of March. Landmark would pay $15 million to acquire Western Atlas' general applications software operations and be responsible for maintaining and supporting the latter's installed software customers and products.

Marketing

Tosco Corp., Stamford, Conn., agreed to acquire Circle K Corp. for about $710 million in cash and stock. Circle K owns 2,500 convenience stores in the U.S., of which about 1,900 sell gasoline. The acquisition would more than double Tosco retail gasoline sales to 8 million gal/day.

Finland's Neste Oy is the first marketer in the Baltic states to sell only unleaded gasoline at its outlets. Neste's 38 service stations in Latvia, Lithuania, and Estonia sell a grade with a valve protection additive as a replacement for leaded gasoline. Neste sold 800 million l. of refined products in the Baltic states last year and recently opened an import terminal at Jonava, Lithuania, with capacity to store 7,800 cu m of refined products.

Drilling-production

ARCO signed a production sharing contract with Sonatrach to undertake a $1.3 billion enhanced oil recovery project in Algeria's Rhourde El Baguel oil field. In addition to capital outlays for the EOR project, ARCO will pay a $225 million bonus to Sonatrach and receive as much as 49% of production. ARCO will use infill wells and its miscible gas injection process to recover an incremental volume of more than 500 million bbl of oil equivalent (BOE) from the field, boosting output to 125,000 b/d from the current 25,000 b/d. ARCO expects to award the main engineering, procurement, and construction management contract early this year, with infill drilling to begin immediately thereafter.

Nuevo Energy Co., Houston, in two deals agreed to buy Unocal Corp.'s California upstream assets. They consist of interests in 42 fields with combined 1995 production of 38,000 b/d of oil and 62 MMcfd of gas and reserves totaling 184 million BOE. Nuevo will pay Unocal $500 million for certain properties and affiliate Torch Energy Advisors $31 million for a 68% interest in Point Pedernales field, which Nuevo owns 12% and Torch acquired in 1994. Torch formed Nuevo in 1990.

Mobil North Sea Ltd. plans to develop Mordred gas field in the southern U.K. North Sea as a subsea satellite of its Galahad platform on U.K. Block 48/12a. The Rowan Halifax jack up rig recently completed drilling the 48/12a-G3 wildcat that found Mordred. The well reached 19,500 ft measured depth, including a 4,800 ft horizontal section. The rig will stay in the field to begin hydraulic fracturing of wells in March, and production is to begin when fracturing is complete. Mobil let a $2.4 million contract to Brown & Root AOC Ltd., Aberdeen, for construction and commissioning work in modifying Galahad platform to take Mordred gas.

Norsk Hydro AS paid a $7.7 million bonus to Kvaerner AS, Oslo, for extra work involved in construction of the concrete substructure for its Troll B semisubmersible oil production platform. Kvaerner dropped efforts to seek additional payment through litigation. Troll B went on stream last September (OGJ, Oct. 16, 1995, p. 121).

Elf Exploration Angola committed to extend the contract of the Jim Cunningham semisubmersible drilling rig owned by Reading & Bates Corp., Houston, for work off Angola. Work is to begin in the third quarter. The commitment calls for the rig to be upgraded to a water depth capacity of 1,400 m vs. the original agreement for 1,100 m and the contract to be extended to four wells from the previous three. The resulting total contract value for the primary term is about $43 million, and a retained 270 day extension option would add $24.3 million.

India approved development of onshore Cambray oil field by Australia's Command Petroleum Holdings and India's Tata Petrodyne. Cambray was among the fields offered for development under production sharing contracts in India's recent sixth round of bidding.

U.S. Export-Import Bank approved disbursements to support $334.5 million of U.S. drilling-production equipment and service exports to Russia. The bank is backing $293.4 million in loans for Ramoil Management Co., Boca Raton, Fla., and $41.1 million for International Tool & Supply Co. Inc. (ITS), Houston. Ramoil will export drilling equipment to Nizhnevartovskneftegas, which plans a 5 year program to drill 240 wells and work over 2,000 shut-in wells in western Siberia. ITS will ship drilling and production equipment to Chernogorneft, a production association in Tyumen, for a project to work over 300 shut-in oil wells.

Chevron Nigeria Ltd. plans to start up two Nigerian oil fields this year. Benin River field on the OML 49 license is to start full production in June. Benin River early production started in December 1995. Ewan field, straddling OML 49 and 95 licenses, will start early production in the second half.

Tankers

U.S. Transportation Department approved financing guarantees for construction of five double hull products tankers by Newport News Shipbuilding & Drydock Co., Newport News, Va. Hvide Van Ommeren Tankers, Fort Lauderdale, Fla., placed the $247 million order. The Jones Act tankers will carry products between the U.S. Gulf and East coasts.

Gas processing

Westcoast Energy Inc., Vancouver, B.C., won a key Federal Court of Canada ruling involving two major gas processing projects in British Columbia. The court overturned a National Energy Board (NEB) decision last May that it did not have authority to regulate construction of the two projects (OGJ, Aug. 7, 1995, p. 36). The NEB ruling had placed Westcoast's Aitken Creek grassroots gas plant and expansion of its existing Pine River gas plant in legal limbo.

Exports-imports

Conoco (U.K.) Ltd. agreed to sell Wingas, a unit of Germany's Wintershall AG, 35 bcf/year of gas from U.K. offshore fields under a 10 year contract, with deliveries to begin in 1998 through the proposed Interconnector pipeline from Norfolk, England, to Zeebrugge, Belgium. The firms are continuing talks on other gas transportation and storage activities. The deal with Conoco will triple to 105 bcf/year Wingas' U.K. gas supply portfolio.

Mobil Producing Nigeria and Nigerian National Petroleum Corp. started construction of storage and loading facilities for Nigeria's $700 million Bonny River natural gas liquids export project. The overall project is about 22% complete, with design, engineering, procurement, and site preparation and dredging completed and sandfilling at Bonny River terminal near completion.

Taiwan's Chinese Petroleum Corp. (CPC) signed a contract with BP America Inc. to buy 10,000-15,000 b/d of Alaskan North Slope crude oil, the first such sale since the U.S. lifted its ban on ANS oil exports in 1995. Earlier reports projected first deliveries as soon as April (OGJ, Jan. 8, p. 27). Meantime, Taiwan's Ministry of Economic Affairs lifted a decades old ban on oil imports from China. The move clears the way for CPC to purchase crude from China.

Star Enterprise signed a contract to buy 70,000 b/d of 20 gravity crude from Venezuela's Maraven SA for its three U.S. refineries. Maraven, a unit of state owned Petroleos de Venezuela SA (Pdvsa), will supply 65,000 b/d of Menemota crude Maraven produces and 5,000 b/d of Pedernales crude Pdvsa unit Lagoven SA produces. The contract carries an option for supply of Merey crude produced by affiliate Corpoven SA. Star Enterprise the past 2-3 years bought 50,000 b/d of Venezuelan low gravity crude under contract.

Bunkers

Venezuela's Lagoven boosted international sales of marine bunker fuels to 10,500 b/d in 1995 from 7,100 b/d in 1994. Sales hit a record 16,300 b/d in November. Lagoven plans to expand sale of bunkers to Caribbean and Central American markets this year.

Petrochemicals

Montell Technology Co. BV obtained a license from Brazil's OPP Petroquimica SA to use its Spheriline polyethylene technology at a plant to be built at Triunfo, Brazil. The new unit is expected on stream in third quarter 1998, coinciding with first production from an ethylene cracker at the site. The new plant will have capacity to produce 260,000 metric tons/years of linear low density and high density polyethylene.

Egyptian Petrochemicals Co. (EPC) is to use the Innovene polyethylene process of BP Chemicals Ltd. in a 100,000 metric ton/year plant to be built at Ameriya, Alexandria. Due on stream in 1999, the plant will be able to produce a variety of polyethylene grades. Output is expected to be sold mainly in Egypt. EPC intends to produce feedstock for the polyethylene unit from a gas cracker it recently proposed to build.

Taiwan's CPC Feb. 25 was to shut down for a 52 day maintenance turnaround a naphtha cracker that is Taiwan's biggest ethylene producer with output of 2.8 million lb/year. The shutdown will cut Taiwan's ethylene output by about 40%.

Chevron Chemical Co. plans to expand by 250 million lb/year to 800 million lb/year its Marietta, Ohio, polystyrene plant, making it the biggest polystyrene plant in North America. Chevron last year debottlenecked several processing operations at the plant to increase capacity to 550 million lb/year.

Farmland MissChem Ltd., a joint venture of Farmland Industries Inc. and Mississippi Chemical Corp., this quarter will begin construction of a 2,040 ton/day grassroots ammonia plant at LaBrea industrial estate, Trinidad. M.W. Kellogg Co. has a lump sum, turnkey contract to build the plant based on its advanced ammonia process that uses a noniron catalyst said to be more than 20 times as active as traditional iron catalysts. U.S. Ex-Im Bank authorized $240 million in financing for the project, to be completed in early 1998.

Oil shale

Russia plans to complete installation this year of its first waste free hard oil shale processing plant with a $1.05 million credit from a German bank. Tatoilgas, a venture of Tatarstan's Tatneft and German combine Mineraloel-Rostoff-Handel, expects to process 48 cu m/day of shale with an estimated 5% yield of shale oil. The venture was established in 1989 initially to process 1 million metric tons of crude oil tank bottom sludge and recover marketable oil. About 600,000 tons of sludge in Tatarstan was processed, yielding 250,000 tons of oil. The shale processing technology was tested in a pilot plant in Germany in 1995.

Copyright 1996 Oil & Gas Journal. All Rights Reserved.