INDUSTRY BRIEFS

NGL

Novagas Clearinghouse Ltd., Calgary, will seek regulatory approval for a 559 mile, 65,000 b/d natural gas liquids pipeline and NGL extraction plant in Alberta. Total cost of the project, slated for completion in fall 1997, is estimated at $250 million (Canadian). The line would extend from northern Alberta to the NGL plant at Redwater, Alta. Novagas, a venture of Calgary's NOVA Corp. and Houston's NGC Corp., also agreed to buy an NGL storage site near Edmonton from Procor LPG Storage Inc. for an undisclosed price.

Alternate fuels

Total Energie, Total's photovoltaic affiliate, and Electricite de France formed an alliance to increase to 25 million francs from 12 million francs outlays for wind energy and solar energy projects in remote areas of developing countries.

Gas storage

Estonia's state gas company Eesti Gaas (EG) signed a protocol with Latvia's state gas company Latvijas Gas (LG) calling for the latter to supply all of EG's gas needs the next heating season from its Incukalns gas storage site. EG started construction of a gas metering station, and LG has since Apr. 25 injected 23 million cu m against working gas capacity of 1.52 billion cu m, up from last year's 1.49 billion cu m.

Exploration

Beach Petroleum, Adelaide, obtained a 100% interest in a production sharing block in a frontier area off North Korea. It covers 28,000 sq km of coastal and deeper waters where only two stratigraphic wells have been drilled. Both reached depths of about 3,500 m and had oil shows. The sedimentary section identified is more than 5,000 m thick, and Russian seismic surveys shot in the 1980s identified prospective structures. The block lies southwest of Russia's Sakhalin oil province and appears to have similar geology.

Elf Congo obtained a deepwater exploration permit, Mer Profonde Sud, in the Gulf of Guinea off Congo adjacent to Elf's Haute Mer block, where Elf is slated to start up Nkossa oil field in June (OGJ, Apr. 15, p. 29). Mer Profonde Sud covers about 3,830 sq km in more than 1,000 m of water. Talks are under way to bring two undisclosed partners into the permit.

Total gauged 9,150 b/d of light crude in a wildcat on Block 2/92 off Angola. Appraisal is planned. Total is operator with a 40% interest, with remaining interests held by state owned Sonangol 25%, South Korean firms Daewoo 18.75% and Pedco 6.25%, and South Africa's Eagle 10%. The block adjoins Texaco operated Block 2-80/85, where Texaco Inc. produces 95,000 b/d of oil and Total holds a 20% stake.

Environment

U.S. Environmental Protection Agency proposed to revise its rules that establish air pollution standards for oil facilities on the Outer Continental Shelf. EPA said the rule would revoke a special offset requirement for sources within 25 miles of a state's seaward boundary and require them to met the same standards as sources within the 25 mile limit.

U.S. Minerals Management Service issued a rule changing its rules restricting flaring or venting of gas to include the burning of liquid hydrocarbons. MMS said, "Requests to burn liquid hydrocarbons are increasing, and we determined that we need to provide regulatory guidance."

Drilling-production

Chevron Niugini and Australia's Barracuda (MIM) submitted plans to develop Gobe area oil fields in Papua New Guinea near the Kutubu oil fields and export pipeline. Cost is estimated at $335 million to develop Main Gobe and Southeast Gobe fields on Chevron's PPL 161 block and straddling PPL 161 and PPL 56, respectively. Start-up is slated for second half 1997.

Ampolex Ltd., Sydney, obtained production license WA-14-L covering Wandoo oil field off Western Australia. This follows Australian Foreign Investment Review Board's approval of the sale of a 40% interest in Wandoo field to Wandoo Petroleum Pty. Ltd. and acceptance of an environmental impact report. Wandoo full development, including an offshore concrete storage tank, is to be complete in December, when production is to reach 40,000 b/d.

Occidental Petroleum of Qatar Ltd. let a $35 million, 3 year contract to McDermott Engineering (Europe) Ltd., London, for support services covering major refurbishment of facilities in Idd El Shargi North Dome field, 90 km north of Doha. Work will include detailed engineering studies for an enhanced oil recovery project from the field's existing infrastructure.

Amoco Norway Inc. had a mud and cuttings processing module installed on Maersk Guardian semisubmersible rig by AMEC Process & Energy AS, Stavanger. AMEC designed the module to meet oil companies' need for an environmentally safe way to dispose of contaminated mud and cuttings. The unit grinds cuttings and water into a slurry that is injected into a disposal well.

Harland & Wolff Ltd., Belfast, which is building the production, storage, and offloading vessel for Schiehallion oil field development west of the Shetland Islands, let contract to Mechtool Engineering Ltd., Darlington, U.K., to supply an escape tunnel for the unit. The tunnel will be designed to withstand effects of an intense jet fire for 30 min while limiting mean internal temperature to 50° C. Schiehallion operator is BP Exploration Operating Co. Ltd.

Mobil Oil Canada Ltd. will sell western Canada acreage producing about 5,000 b/d of oil and 35 MMcfd. of gas to a new royalty trust, ARC Energy Trust. ARC Financial Corp., Calgary, filed a preliminary prospectus for a public offering but has not set a unit price.

Benton Oil & Gas Co., Carpinteria, Calif., completed installation of third phase production facilities in Venezuela's Uracoa oil field, boosting productive capacity to 45,000 b/d from 34,000 b/d. Further Uracoa development calls for drilling 40 wells in 1996-97 in addition to the existing 32 vertical and 28 horizontal producing wells. Fourth phase production facilities, scheduled for installation in 1997, will increase capacity to 60,000 b/d and process production from Uracoa and production from other fields in the South Monagas Unit.

Norway's Den norske stats oljeselskap AS signed a letter of intent to hire Reading & Bates Corp.'s J.W. McLean semisubmersible rig to develop Connemara oil field, Ireland's only offshore oil strike (OGJ, May 20, p. 33). The project, expected to begin in March 1997 following upgrade of the rig's BOP and subsea equipment handling systems, is expected to take 19 months and have a total contract value of about $59.8 million.

Amoco Exploration & Production Co. gave a firm, long term commitment to Sonat Offshore Drilling Inc., Houston, enabling Sonat to proceed with construction of what it claims will be the largest, most technically advanced deepwater rig. The dynamically positioned, dual activity drillship will be rated to 10,000 ft of water and be operational by mid-1998. In addition, Sonat will provide Amoco a semi rated to 3,500 ft of water to meet Amoco's immediate deepwater drilling needs. Sonat plans to buy a second generation semi and upgrade it to meet this requirement by mid-1997. Amoco's combined commitment on the two rigs is for at least 6 years.

Unocal Thailand Ltd. concluded negotiations with Petroleum Authority of Thailand for sale of gas from Pailin field in the Gulf of Thailand. A 30 year gas sales agreement is to be signed next month following Thai government approval. Under the proposed agreement, Pailin production will begin in mid-1999 at 165 MMcfd of gas, rising to 330 MMcfd in 2001 with the expected delineation of more reserves. Unocal estimates current reserves at almost 1 tcf but believes the field may contain as much as 2 tcf.

Refining

Singapore Refining Co. commissioned a 33,000 b/d resid catalytic cracking unit (RCCU) as part of a $1 billion expansion and upgrade of its Pulau Merlimau, Singapore, refinery. The RCCU will upgrade heavy residues to premium light products, notably gasoline and middle distillates, increasing refinery output of unleaded gasoline and low sulfur diesel. Included in the revamp are a new 60,000 b/d crude unit, hyrofiner, hydrogen plant, alkylation unit, methyl tertiary butyl ether unit, and a $35.71 million Dimersol unit.

Shell Refining Co. plans to add a long residue catalytic cracking unit (Lrccu) at its 105,000 b/d Port Dickson, Malaysia, refinery. The first of its kind in Malaysia, the Lrccu is designed to convert long residue feedstocks into higher value light products, including gasoline, liquefied petroleum gas, diesel fuel, and propylene. Work is to begin by yearend and be complete in 1999. Cost and capacity are pending completion of studies.

Ukraine will sell its interests in the Lisichansk and Odessa refineries at auction. The winning bidder for the 45% interest in the 482,000 b/d Lisichansk refinery will have to pay the refinery's debt to Italy's Tecnimont for construction of a petrochemical unit. At the 78,000 b/d Odessa plant, the winning bidder will be required to invest at least $50 million in upgrading. Likely bidders for Lisichansk include its major suppliers: Russian producers Yukos, Rosneft, Vostochnaya Neftyanaya Co., and Tyumenskaya Neftyanaya Co.

Pipelines

ARCO Pipe Line Co. plans to reverse the flow in its 16 in. Line 90 crude oil pipeline to increase deliverability from California's San Joaquin Valley to Los Angeles area refineries by as much as 70,000 b/d. ARCO expects the reversal to be in service no later than January 1998 and cost less than $10 million. Depending on customer needs and other things, Line 90 could be reversed as early as second quarter 1997. Work will begin at a connection with the All-American Pipeline at Cadiz, Calif.

U.S. Transportation Department's Research & Special Programs Administration issued a statement that exempts some petrochemicals from regulation when moved in low stress pipelines. The policy also allows operators of low stress pipelines to delay compliance with other rules until July 12.

Novagas started deliveries through its new pipeline from Northeast British Columbia to Alberta. It is moving 32 MMcfd from fields 248 miles north of Fort St. John, B.C., to the NOVA pipeline system in Alberta. The system, with 87 miles of gathering lines and a 10 mile Alberta border connection, was built last winter.

Companies

BJ Services Co., Houston, filed an appeal with Ontario Securities Commission against a rival $695 million (Canadian) takeover bid for Nowsco Well Service Ltd., Calgary, by Great Lakes Chemical Corp., West Lafayette, Ind. BJ said terms of an agreement between Nowsco and Great Lakes prevent it from raising its offer to Nowsco shareholders. BJ offered $27/share for Nowsco early in April, and Great Lakes later bid $30.90/share for the service company (OGJ, May 20, p. 33). The agreement prohibits BJ from gaining access to Nowsco proprietary data unless it scraps its current bid and gives Great Lakes right of first refusal if a higher offer emerges.

Apache Corp., Houston, completed its $605 million acquisition of Phoenix Resource Cos. Inc., Oklahoma City (OGJ, Apr. 1, p. 36). Phoenix is now a wholly owned subsidiary of Apache. All of Phoenix's oil and gas assets are in Egypt's Western Desert, where Apache has held interests since 1993. With the merger, Apache will own a 75% interest in Qarun oil field, which is producing about 6,500 b/d of oil. Production is to build to about 35,000 b/d after completion of production facilities and a 30 mile pipeline in the fourth quarter.

Clyde Petroleum plc, Ledbury, U.K., offered $173 million (Australian) for the entire share capital of Australia's Crusader Ltd. Crusader holds exploration and production assets mainly in Australia's onshore Cooper basin and offshore Gippsland and Otway basins, and Timor Sea area. Clyde said deregulation of some state energy markets in southeastern Australia July 1 is expected to provide nearby gas producers with new sales opportunities well into the next century.

Petrochemicals

Amoco Corp. plans to expand paraxlyene capacity at its Decatur, Ala., petrochemical complex by 350,000 metric tons/year, boosting company paraxylene capacity to about 2.1 million tons/year.

Tankers

Independent tanker owners operate 72% of the world's crude oil and refined products tanker fleet, according to reports given to the International Association of Independent Tanker Owners annual meeting in Hong Kong. This share is expected to increase as major oil companies and state oil firms further cut tanker fleets because of higher operating costs and tighter oil spill prevention rules.

Labor

Norway's mechanical engineers ended a 10 day strike after reaching agreement on a new compensation package. The walkout shut down most Norwegian shipyards and began to disrupt oil and gas production. A strike by oil workers that also disrupted the country's oil and gas production ended earlier (OGJ, May 20, p. 32).