INDUSTRY BRIEFS

Gas processing

GPM Gas Corp., Houston, agreed to buy Permian basin gas gathering and processing assets from Amoco Production Co., including Midland Farms, North Cowden, Mojo, and Goldsmith systems gathering about 40 MMcfd of gas from 420 meter stations. The deal will add 631 miles of gathering pipelines and nine compressor stations to GPM's gathering assets and includes Amoco's interest in the 26 MMcfd North Cowden processing plant in Ector County, Tex. GPM plans to shut down the North Cowden plant, link related gathering pipelines to its own system, and send much of the gas to the recently upgraded Goldsmith processing plant (OGJ, June 3, p. 41).

Exploration

Gabon let an exploration and development contract to Santa Fe Energy Resources of Gabon (Mondah Bay) unit of Santa Fe Energy Resources Inc., Houston, covering the 600 sq mile onshore-offshore Mondah Bay block in Gabon's Atlantic Salt basin. The pact includes a 2 year exploration period with a 3 year optional extension and a 20 year production period. Santa Fe Gabon plans next year to drill the first of several offshore prospects in less than 100 ft of water, targeting objectives at less than 5,000 ft.

Colombia's environmental ministry approved a plan by Harken Energy Corp., Dallas, to begin exploratory drilling of Palo Blanco prospect on Harken's Alcaravan association contract area in the Llanos basin. Harken, which has 40 km of reprocessed seismic data and 40 km of new seismic over the acreage, is to drill 1 Estero wildcat to 10,500 ft TD to test Carbonera, Mirador, Guadalupe, Gacheta, and Ubaque intervals. An undisclosed partner paid Harken $1.875 million for 30% interest in Palo Blanco prospect.

Norway's Saga Petroleum AS found oil near Statfjord field on Block 33/9 in the Norwegian North Sea, revealing a structure extending eastward onto Block 34/7, interest owner Den norske stats oljeselskap AS (Statoil) reported. Saga spudded an appraisal well. A preliminary estimate pegs reserves of the find at 30-40 million bbl of oil, which Statoil said is commercially interesting because of its proximity to production and transportation facilities.

Esso Exploration & Production U.K. Ltd. drilled a dry hole on U.K. Block 112/15 in the Irish Sea after previously releasing extensive details about the wildcat because of the virgin nature of the tract, its proximity to shore, and environmental concerns over Irish Sea oil operations (OGJ, May 6, p. 46). Having no further plans to drill on Block 112/15, Esso released Glomar Adriatic XI jack up to drill another Esso well, on U.K. Irish Sea Block 109/5 southeast of the Isle of Man.

Conoco (U.K.) Ltd. acquired a farmout on four blocks in the Porcupine basin off western Ireland operated by Total Oil Marine plc. Conoco is to receive a 30% interest in Blocks 35/17, 35/22, 35/28, and the western half of Block 35/23 by funding a work program. With the deal, operator Total holds 50% interest in the acreage, Conoco 30%, and DSM Energy Ireland BV 20%. Partners in July acquired 2D seismic data over the area and plan an exploratory well in 1997.

Hartwell Petroleums Ltd., Calgary, gauged two gas discoveries at Doris field in the Fort Assiniboine region northwest of Edmonton. Hartwell has 100% interest in the two wells, which flowed 25.5 MMcfd and 23.9 MMcfd in tests, prompting the company to expand capacity of an area gas plant to 18 MMcfd from 6 MMcfd.

Refining

Louisiana Land & Exploration Co., New Orleans, sold its 74,000 b/d refinery and related facilities near Mobile, Ala., to Shell Chemical Co. Included in the deal were a deepwater terminal at the Port of Mobile, two 7 mile crude and products pipelines between the refinery and terminal, and 800 acres of land.

Marketing

Elf Oil (U.K.) Ltd. is studying feasibility of opening five retail outlets without fuel sales in U.K. urban centers, marking a new strategy in the fight between oil companies and supermarkets for fuel and linked retail sales. Elf's shops would operate under the company's Le Shop brand name, outlets of which already are being installed at Elf gasoline stations throughout Britain.

Drilling-production

Petro-Canada, Calgary, trimmed to 22 million bbl from 43 million bbl its estimates of reserves at Algeria's Tamadanet field after declaring a delineation well in the northern part of the field a dry hole. Petro-Canada plans more drilling in southern Tamadanet and is drilling a wildcat in Tinrhert East region northwest of the field. The company recently began producing in Algeria and has increased average output to 12,000 b/d.

Hurricane Hydrocarbons Ltd., Calgary, agreed to buy 100% interest in Kazakhstan's Kuzhneftegaz, a production cooperative producing 50,000 b/d of oil from estimated reserves of 500 million bbl of oil equivalent (BOE). Hurricane declined to disclose the value of the deal, expected to close by Nov. 30. Samson Investments Ltd., Tulsa, earlier had bid for Kuzhneftegaz, but the deal never closed.

Conoco (U.K.) Ltd. published test results of two early production wells drilled by Glomar Arctic III semisubmersible rig at Banff field on U.K. North Sea Block 29/2a. The wells, which tested at a combined rate of 17,735 b/d of oil and 7 MMcfd of gas, are to start producing this month by way of a floating production unit with shuttle tanker offtake. Conoco plans to use the early production data to optimize Banff development, to begin in first half 1998, boosting output to 35,000 b/d. The company estimates Banff reserves at 20-110 million bbl of oil, of which 5.5 million bbl will be recovered via early production.

BP Exploration Operating Co. Ltd. let a $23 million contract to Kvaerner Oilfield Products AS, Oslo, for supply of 73 km of steel tube umbilicals. BP plans to install the umbilicals in Machar, Monan, and Mungo fields, among seven fields BP is preparing to produce as part of its Eastern Trough Area Project development (OGJ, Jan. 22, p. 21).

Britannia Operator Ltd. joint venture of Chevron U.K. Ltd. and Conoco (U.K.) Ltd., formed to develop and operate Britannia field in the U.K. North Sea, let the operations, maintenance, and service contract for the field to Atlantic Power & Gas Ltd. (APG), Aberdeen, covering the first 7 years of the field's production with options for extension for field life. Production is to begin in late 1998 and last for 30 years.

Total and partners agreed to increase supplies of natural gas to Thailand's state owned Petroleum Authority of Thailand from giant Bongkot gas field in the Gulf of Thailand to 550 MMcfd from 350 MMcfd. A third gas processing train with two wellhead platforms and associated pipelines will boost production to 630 MMcfd at a cost of $160 million. The added supplies will start up in mid-1998 from Ton Sak satellite, a 1994 discovery, as well as Bongkot. Plans call for another platform to develop reserves in the southern portion of the Bongkot block.

Spills

Canadian officials with little incident raised Irving Whale oil barge off Prince Edward Island in the Gulf of St. Lawrence, 26 years after it sank in a storm with a load of bunker C fuel oil and 7.2 tons of PCB oil (OGJ, Aug. 5, p. 25). The vessel, which had been leaking cargo, is to be stripped of marine growth then towed to a Halifax, N.S., shipyard for refurbishment for service as a lumber barge. Environmentalists had fretted that oil from the sunken barge could endanger rich fishing grounds in the area. Only about 31 bbl of bunker C fuel oil was spilled during the lift.

Companies

Saudi Arabian Oil Co. (Aramco) reportedly is negotiating with Petroleos de Portugal EP over acquisition of a substantial stake in the company, now owned 55% by government and 45% by private investors. Aramco last year bought a 50% stake in Greek refiner Motor-Oil Hellas.

Canadian Occidental Petroleum Ltd., Calgary, formed CXY Energy Offshore Inc. through a reorganization of Canadian Offshore Production Co. and Canadian Occidental of California Inc. to manage Gulf of Mexico activity for CXY Energy Inc. (CXYE), Dallas, and affiliates. CXYE in first half 1996 produced an average 72 MMcfd of gas and 14,300 b/d of oil from reserves estimated at yearend 1995 at 45 million BOE, mostly in the Gulf of Mexico. The company holds leases on 37,700 acres in the gulf.

Norcen Energy Resources Ltd., Calgary, expects to raise $200-250 million (Canadian) from the recent sale of 50% interest in Superior Propane Ltd., Calgary, into an income trust.

Gas marketing

BP Gas, a gas marketing company formed in May by British Petroleum Co. plc in the breakup of Alliance Gas Ltd., secured two major supply deals with Imperial Chemical Industries plc (ICI) (OGJ, May 27, p. 28). Under a $150 million deal, BP Gas is to supply gas to Rocksavage power station under construction near Runcorn, U.K., which is to provide electricity to nearby Castner Kellner Chemicals plant beginning early in 1998. BP under a $15 million pact is to supply ICI with gas for producing steam, electricity, and halogen-based chemicals at Castner Kellner plant.

Pipelines

Nova Gas Transmission Ltd., Calgary, completed a 5 year incentive toll agreement effective Jan. 1, 1996, with Alberta gas producers that is expected to result in substantial savings for producers and the pipeline. Nova this year will earn $1.15 billion (Canadian) to operate its Alberta pipeline system, with any savings on operations to be split equally with producers. The agreement also eliminates need for annual toll hearings before Alberta's Energy and Utilities Board. Interprovincial Pipe Line Inc. and TransCanada PipeLines Ltd., both of Calgary, earlier completed similar agreements with producers.

Express Pipeline sponsors plan to start construction this month on five spreads in Montana and Wyoming, after sending letters of intent last week to five U.S. pipelay contractors for the 512 mile U.S. segment of the 785 mile, 24 in. oil pipeline (OGJ, Aug. 5, p. 25). Associated Pipe Line Contractors Inc., Houston, will lay the 125 mile Spread 1 beginning at Wild Horse, Mont.; H.C. Price Co., Dallas, 100 mile Spread 2; U.S. Pipeline Inc., Houston, 88.4 mile Spread 3; Gregory Cook Inc., Houston, 94.1 mile Spread 4; and Sheehan Pipe Line Construction Co., Tulsa, 104.5 mile Spread 5.

Canada's National Energy Board plans a hearing in November to review new bids to export gas. To be included in the hearings, applicants must file bids on or before Aug. 29.

Oilsands

Syncrude Canada, Fort McMurray, Alta., in first half 1996 recovered a record 34.8 million bbl of oil from its oilsands operation, 200,000 bbl more than in first half 1995. The company in June delivered a record 14.1 million tons of oilsands feed to its extraction plant-500,000 tons more than in December 1995-and extracted more than 8.2 million tons of bitumen, surpassing the high set in August 1993 by about 150,000 bbl.

Petrochemicals

Phillips Petroleum Co. licensed Shell/Montedison joint venture Montell Technology Co. BV to export polypropylene to the U.S. Phillips' U.S. patent for polypropylene prevents imports to the U.S. by unlicensed producers. Financial terms of the agreement were not disclosed.

Novacor Chemicals (Canada) Ltd., Calgary, let contract to M.W. Kellogg Co., Houston, for engineering, procurement, and construction of a cracking furnace, the 14th at Novacor's Corunna, Ont., olefins complex. The U.S. $18 million expansion project will use Kellogg furnace technology to improve feedstock flexibility and increase capacity by 100 million lb/year. Start-up of the new unit is set for fall 1997.

China's Shanghai Chlor Alkali Chemical Co. Ltd. (SCAC), Shanghai, let a contract to Uhde GmbH, Dortmund, Germany, for engineering and equipment supply of an ethylene dichloride (EDC) plant being built at SCAC's vinyl chloride monomer and polyvinyl chloride (PVC) complex in Shanghai. Uhde also is to engineer and supply an EDC degasser and a PVC dryer based on Vinnolit GmbH technology. Commissioning is set for third quarter 1997.

Chevron Chemical Co. reached a land use agreement with the city of Zhangjiagang, China, on plans to build a 40,000 ton/year polystyrene plant there. Construction on the plant is to begin late in 1996 or early in 1997 and take 2 years. Plans include increasing capacity to 150,000 tons/year at the plant and adding high impact polystyrene production.

BP Chemicals Ltd. and Dow Chemical Co. agreed to develop and license a combination of a BP gas phase polyethylene (PE) process and a related Dow catalyst, in a plan to expand the options and opportunities of polyethylene producers. The program will allow BP PE process licensees access to new markets and ability to improve their competitiveness.

Catalysts

UOP, Des Plaines, Ill., and Packinox Inc. unit of Packinox SA, Paris, formed a 50-50 limited liability company, Temperature Controlled LLC, Des Plaines, to develop and commercialize a new reactor that provides enhanced control of catalyst temperature profiles. The reactor will be suited for endothermic and exothermic reactions. A demonstration unit has been operating in Europe for 16 months.