News INDUSTRY BRIEFS

Gas processing

Calub Gas Share Co. let contract to Parsons Process Group Inc.'s London unit to provide design and project and construction management services for a gas processing plant tied to Ethiopia's first commercial hydrocarbon development, a natural gas field in the Ogaden basin. When complete in 1998, the $50 million plant will handle gas and condensate and produce liquefied petroleum gas, kerosine, diesel, and gasoline. It is funded by the World Bank.

Exploration

Lagoven SA found 31 gravity crude in a new pool in the Bachaquero oil field area of Venezuela's Lake Maracaibo. Its BA-2174 wildcat, drilled to 10,300 ft, flowed 6,000 b/d of oil on test. Lagoven estimates reserves at 55 million bbl of oil and considers the discovery important because it is on trend with other recent new pool strikes at Bachaquero that have added 20,000 b/d to the old giant field's productive capacity.

A unit of Kerr-McGee Corp. signed a contract with China National Offshore Oil Corp. to explore an area of about 415,000 acres in China's Bohai Bay. Kerr-McGee China Petroleum Ltd. will operate Contract Area 05/36, just east of Kerr-McGee's three existing operated blocks, 04/36, Getuo, and Laopu, about 100 miles southeast of Beijing, in average water depths of 75 ft. Interests are Kerr-McGee 65% and Huffco China ldc 35%. Kerr-McGee plans to drill two wells in Bohai Bay this year.

Pipelines

Enron Capital & Trade Resources acquired a 38.67% interest in Promigas, a natural gas pipeline operator in Colombia, from state owned Empresa Colombiana de Petroleos for $100.5 million. Promigas operates 900 km of pipelines in Colombia as well as compression and other services, compressed natural gas vehicle conversions and sales, and investments in other gas related businesses.

Canada's National Energy Board approved an application from Novagas Clearinghouse Pipelines Ltd., Calgary, to lay the Pesh Creek pipeline from British Columbia to Alberta. The 60 MMcfd, 10 mile, 10 in. gas line will extend from a processing/metering plant in Northeast British Columbia to a proposed NOVA Gas Transmission Ltd. metering station in Northwest Alberta. Completion is scheduled Apr. 30 for the $2.9 million (Canadian) line.

Chauvco Resources Ltd., Calgary, will lay a 35 mile, 90 MMcfd pipeline to ship gas to Westcoast Energy Ltd. processing facilities in Northeast British Columbia. The Martin Creek pipeline will move gas for Chauvco and other producers in the area. It is to go on stream in May.

NOVA Gas International Ltd. and partners received final approval from Chilean regulators for the $350 million Chilean section of the GasAndes pipeline they propose to lay from Argentina to Santiago. Construction is under way on the Argentine section of the project.

LNG

Federal Energy Regulatory Commission issued a draft environmental impact statement supporting Granite State Gas Transmission Co.'s construction of a liquefied natural gas storage facility. Construction of the $44 million, 580,000 bbl capacity tank is to begin this summer and be complete by Nov. 1, 1998.

Refining

U.S. Commerce Department's Foreign Trade Zone (FTZ) Board received an application from Shell Oil Co. asking FTZ status for its refinery at Norco, La. In addition, Mobil Oil Corp. asked to change the FTZ status of its Beaumont, Tex., refinery. Conoco Inc. also asked to revise FTZ status for its Lake Charles, La., refinery. Conoco is seeking more flexibility in producing petrochemical feedstocks and byproducts.

Tosco Corp. completed purchase of BP Oil's U.S. Northeast assets. Included are an exclusive 15 year license to market under the BP brand in an 11 state Northeast region, as well as extension to 15 years from 11 Tosco's exclusive BP license in nine western U.S. states, BP's current Northeast retail system of 500 branded outlets, BP's Northeast wholesale marketing system of terminals and pipeline interests, and BP's 190,000 b/d Marcus Hook, Pa., refinery, which is being taken over in a shutdown mode. Tosco intends to sell certain wholesale marketing assets surplus to its needs. The future of the refinery is under study, Tosco said, because its profitability can't be assured.

Futures

Kansas City Board of Trade (KCBT) sought approval from the Commodity Futures Trading Commission to begin strip trading in its western natural gas futures contract effective Feb. 12. In a strip transaction, a trader simultaneously buys or sells an equal number of contracts in each of two or more consecutive futures contract months. KCBT also extended by 1 day the trading period of its gas contract, making the last trading day the fourth business day before the contract delivery month.

Companies

Pembina Acquisition Corp. extended a $485 million (Canadian) takeover bid for Mark Resources Ltd. to Feb. 12. It is the second extension of the $7/share bid (OGJ, Jan. 29, Newsletter). Enerplus Energy Services Ltd. is competing with an offer to trade each Mark share for $2 cash and one trust unit that would pay dividends to buyers. Enerplus will present its offer to Mark shareholders in mid-March. All three are Calgary firms.

IPL Energy Inc., Calgary, offered $214 million (Canadian) to buy the remaining 15% interest in Consumers' Gas Co., Toronto, it does not own. The takeover bid is subject to approval by Ontario. If it receives approval, IPL would formalize its bid, and Consumers' would appoint an independent financial committee to evaluate the bid. Consumers' distributes gas to about 1.2 million customers in southern and eastern Ontario and in northern New York.

NorAm Trading & Transportation Group, Houston, will cut about 275 jobs in a restructuring of NorAm Energy Corp.'s gas pipeline group, citing a need for streamlining and improved efficiency as a result of deregulation and increased competition in the natural gas industry. It will retain more than 700 employees.

Drilling-production

Chevron Canada Resources Ltd. and Mobil Oil Canada Ltd. will develop their own plans for handling oil produced from Hibernia oil field development off Newfoundland. The companies had issued a bid tender for an onshore terminal but decided against letting a contract after reviewing bids. Now, they will on their own build an onshore transshipment terminal or a third shuttle tanker, thus eliminating the need for an onshore terminal. The Hibernia group earlier placed orders for two tankers to shuttle crude from an offshore production platform to an onshore terminal.

Petroleos Brasileiro SA unit Brasoil let contract to Grupo Astilleros Espanoles, Madrid, for conversion of a tanker into a floating production, storage, and offloading (FPSO) vessel at its Cadiz yard. The 283,000 dwt Cairu crude carrier will become Petrobras 32 FPSO for operation in Marlim field in the Campos basin off Brazil. The vessel, to be anchored in 170 m of water, will have capacity to handle 100,000 b/d of oil for 20 years. It is slated for delivery at yearend 1997.

Russia's Lukoil let contract to GeoQuest, Houston, to supply integrated software and workstations to help develop oil and gas fields in western Siberia's Kogalym area. GeoQuest started delivery of $4 million worth of software and workstations to Lukoil and affiliate Kogalymneftegaz. The equipment will be used to study Pokhovksoe oil field, which produces more than 123,000 b/d from 3,000 wells.

Chevron Corp. unit Cabinda Gulf Oil Co. Ltd. (Cabgoc) started production of 17,000 b/d of oil from Angola's Nemba offshore field. Cabgoc installed a three well subsea completion system on Block B in 400 ft of water about 40 miles off Angola's Cabinda enclave. Nemba oil is produced into an FPSO vessel for processing and transport via pipeline to shore. Production will be maintained at about 20,000 b/d until installation in 1998 of South Nemba and Lomba platforms. Production from the two platforms is to begin in second quarter 1998 and peak at about 80,000 b/d in 1999.

Petrochemicals

Taiwan's state owned Taiwan Fertilizer Co. (TFC) is studying a plan to join an $800 million venture to produce ammonia and urea in Myanmar. Other potential investors in the project include Japan's Itochu Corp., Brown & Root Inc., Houston, and an undisclosed U.K. company. TFC did not disclose its proposed level of involvement in or details of the venture, which it said is in the preliminary planning stage. Currently, Myanmar bans direct investment by Taiwanese companies.

Montell Polyolefins, a venture of Shell International Chemicals Co. Ltd. and Montedison SpA; and private Brazilian firms Cia. Suzano de Papel e Celulose and Cia. Ipiranga Quimica acquired the Polipropileno SA and Koppol Films SA units of Brazil's state owned Petrobras Quimica. The acquired firms produce polypropylene resins, compounds, and films. Montell also plans to bid with its Brazilian partners for shares in Polibrasil, due to be auctioned under the government's privatization program in May.

Borealis AS, the Statoil/Neste Oy petrochemical venture, signed a letter of intent with Montell Polyolefins to take over from Montell management their 50-50 joint venture North Sea Petrochemicals NV (NSP). NSP operates a 400,000 metric ton/year propane dehydrogenation unit and propylene/propane splitter and a 250,000 metric ton/year polypropylene plant at Antwerp. Borealis, with related polyolefins operations at Antwerp, is better placed to manage the NSP site and thus increase efficiency, the companies said.

BP Chemicals Ltd. will build a second polyketones pilot plant at Grangemouth, Scotland, with a view to testing market potential. BP, which did not disclose pilot capacity, wants to see how market development proceeds before deciding on a full scale plant. BP and GE Plastics also signed a joint research and development contract to speed introduction of polyketones for engineering applications. BP also sees applications in fibers, performance barrier films, and polymer blends.

Sasol Ltd., Johannesburg, commissioned a $10 million methyl isobutyl ketone (MIBK) plant at its Sasolburg, South Africa, petrochemical complex. The plant can produce 15,000 metric tons/year of MIBK, a solvent used in the paint industry. Eighty percent of output will be exported. Construction involved extensive use of redundant equipment that was revamped to build a plant for half the cost of a comparable grassroots unit.

National Corp. Uzbekneftegas, a unit of Uzbekistan's Ministry of Oil & Gas, let a $500 million contract to ABB Group, Norwalk, Conn., and a combine of Japanese companies to build a natural gas fed petrochemical complex at Shurtan, Uzbekistan. The contract covers construction of feed gas treating facilities, a 140,000 ton/year ethylene plant, 125,000 ton/year polyethylene plant, and a 17,000 ton/year butene-1 copolymer plant and associated offsites and services.

Associated Octel Co. Ltd. of Ellesmere Port, U.K., was fined $225,000 and ordered to pay legal costs of $215,000 following British Health & Safety Executive prosecution. HSE took Octel to court after a Feb. 1, 1994, fire at its ethyl chloride plant at Ellesmere Port. Although no one was injured, HSE said there was an explosion risk that endangered the health and safety of employees and firefighters (OGJ, May 23, 1994, p. 41).

Shell Chemical Co. unit Pecten Poliesters Manufacturas SA de CV named M.W. Kellogg Co. managing contractor for a $100 million, 200 million lb/year polyethyelene terephthalate plant to be built at Altamira, Mexico. Grupo Bufete Industrial, Mexico City, will provide engineering for all offsite and infrastructure facilities and plant construction.

ICI Pakistan named Foster Wheeler 's U.K. division design, engineering, procurement, and construction consultant for second phase of a $350 million, 400,000 ton/year purified terephthalic acid (PTA) plant under construction at Port Qasim, Pakistan. The PTA plant, Pakistan's first, is to start up late in 1997.

Marketing

Fortune Oil plc, London, opened three modern design gasoline stations in China and expects the total to reach nine by the end of March. The company plans to open another 15 stations in China in 1996. Total cost is pegged at about $20 million for the 25 stations in the cities of Shunde, Zhuhai, Zhongshan, Zhaoquing, Panyu, and Guangzhou.

Exports-imports

Venezeula's Maraven SA shipped its first two cargoes of heavy crude for processing at Chevron Corp.'s Pascagoula, Miss., and Perth Amboy, N.J., refineries. Volumes involved are 350,000 bbl of Bachaquero crude sent to Perth Amboy and 310,000 bbl of Merey crude to Pascagoula. The supply deals are part of a $2 billion venture between Chevron and Maraven that includes further development of Boscan oil field in Venezuela's Zulia state to boost production to 115,000 b/d from 80,000 b/d (OGJ, Dec. 25, 1995, p. 29).