INDUSTRY BRIEFS

Alternate fuels

Total claimed two firsts with start-up of the Nord ethyl tertiary butyl ether (ETBE) unit at its Dunkirk, France, refinery. Total said the $30 million, 50,000 metric ton/year unit is the world's first grassroots, purpose built ETBE unit and the first instance of a venture between oil and agricultural interests to produce ETBE. The unit uses as feedstock ethanol derived from wheat and beets. Venture interests are Total 40%, Eridania Beghin-Say 23%, Bio-Ethanol Nord-Picardie 17%, and two French farm associations 10% each.

Bitor Europe Ltd., a unit of Petroleos de Venezuela SA, secured another European contract for its Orimulsion boiler fuel. Bitor will supply 300,000 metric tons/year of the heavy oil-water emulsion to Lithuanian state utility Lithuanian Power System for 3 years. Deliveries will increase to 500,000 tons/year by 2012. Orimulsion is now burned in U.K., Denmark, and Italy, with negotiations under way for supplies to Belgium, Germany, Hungary, and Portugal (OGJ, Apr. 3, 1995, p. 32).

LPG

Taiwan's China Petrochemical Development Corp. (CPDC) entered a $25 million venture with an undisclosed state owned Chinese company with refineries in China's Fujian province to build a liquefied petroleum gas plant in the province. Production is projected at 250,000-300,000 metric tons/year the first full year of operation, climbing gradually to 600,000 tons/year. LPG will be marketed in China. CPDC will provide 60% of financing.

Japan's Nissho Iwai Corp. and Malaysia's Petroleum Nasional Bhd. plan to jointly market LPG in southern China in a venture with two local companies. The venture plans to build LPG storage tanks and retail outlets at Yangjiang, Guangdong, at a total cost of $7.4 million. Import and sales of 70,000 metric tons/year of LPG are expected to begin in summer 1997.

Drilling-production

Amerada Hess AS declared its South Arne oil discovery on Danish North Sea Blocks 5604/29 and 30 commercial. The South Arne discovery well flowed almost 2,500 b/d of oil in February 1995. Amerada is studying as development options either a fixed platform with oil storage and processing facilities or a floating production storage and offloading unit. Gas would be piped to shore under either option. Its choice will depend on access to appropriate oil and gas export facilities. Feasibility studies are under way, with start-up slated for 1998.

Amoco Norway Oil Co. installed a wellhead platform in Valhall field off Norway, a project that took only 10 months from contract award to installation. The $234 million platform has space for 19 wells, giving access to reserves estimated at 82 million bbl of oil and 154 bcf of gas. It will help Amoco boost production by 40,000 b/d to 125,000 b/d by yearend 1998. Valhall, on Norwegian North Sea Blocks 2/8 and 2/11, has been producing since 1982. Total field reserves remaining at yearend 1994 were estimated at 380 million bbl of oil and 647.5 bcf of gas.

Cairn Energy plc, Edinburgh, completed winter drilling on Block 16 off Bangladesh so the rig can be moved off location prior to monsoon season. Two gas wells on the block have been tested, and the Sangu discovery has proved commercial (OGJ, Mar. 4, p. 42). Cairn plans to install a production platform on the block, linked by a 45 km export pipeline to Chittagong that will be connected to the domestic gas grid. Sangu will be the first field development off Bangladesh.

BP Exploration Operating Co. Ltd. let contract to KCC Process Equipment Ltd., Sunbury-on-Thames, U.K., to supply a gas dehydration unit for its Eastern Trough Area Project (ETAP) development in the U.K. North Sea. The $2.7 million tri-ethylene glycol unit can handle a process gas flow of 554 MMcfd. ETAP is slated for first production in late 1998 (OGJ, Jan. 22, p. 21).

Texaco North Sea U.K. Co. sold a 15% interest in its Captain discovery to South Korea's state owned Korea Petroleum Development Corp. for $210 million. Texaco said the deal is particularly complex because of the need to preserve lease financing of field development equipment. Texaco is developing Captain with a wellhead platform, a production, storage, and offloading vessel, and a dedicated shuttle tanker (OGJ, Oct. 24, 1994, p. 37).

Saga Petroleum AS exchanged with Norske Conoco AS a 30% stake in the Varg discovery off Norway and a 25% stake in an area southeast of Varg for a 20% share in a license covering an area north of Troll field. Saga said the deal strengthens its interest in the exploration area around Varg, until recently known as the Fenris prospect. Saga expects to place Varg on stream in second quarter 1998 using a wellhead platform and floating production unit (OGJ, Feb. 19, p. 58).

Denbury Resources Inc., Calgary, will pay $42 million to Amerada Hess Corp. for leases in Louisiana and Mississippi that produce about 2,300 b/d of oil and 7 MMcfd of gas.

Lubricants

Bechtel Corp., Houston, agreed to purchase Texaco Development Corp.'s lubricating base oil manufacturing technologies. The agreement includes all licenses, contracts, patents, and other intellectual property. For 5 years, the companies will colicense the processes, which include MP Refining, dewaxing, wax fractionation, and specialized hydroprocessing technologies.

Petrochemicals

Eastman Chemical Co., Kingsport, Tenn., let contract to Foster Wheeler Iberia, Madrid, for detailed engineering, equipment, materials supply, and construction of a 130,000 metric ton/year polyethylene terephthalate (PET) plant in Rotterdam (OGJ, Apr. 15, p. 37). Start-up is scheduled for first quarter 1998. Foster Wheeler also is building PET plants for Eastman at San Roque, Spain, and Zarate, Argentina (OGJ, Mar. 18, p. 40).

Taiwan's CPDC received permission from the country's Investment Commission to invest in a venture to produce acrylonitrile butadiene styrene (ABS) in China, a first for a Taiwanese company. Chi Mei Corp., Taiwan's biggest ABS producer, earlier disclosed a project to manufacture ABS in China but later canceled the project in favor of setting up an ABS plant in Malaysia.

Coalbed methane

Marine & Mercantile Securities plc (M&M), London, entered a venture with Energie Kladno AS, Kladno, Czech Republic, to develop coalbed methane resources in established coal fields in that country. The Czech company was formed by privatizing a state concern. It holds eight coalbed methane licenses covering a total of 942 sq km. M&M and Energie Kladno, operating under the name Eurogas AS, plan a $3 million program to evaluate five existing wells and drill more wells. Energie Kladno estimates coalbed methane reserves on its licenses at 1.8 tcf. M&M hopes to begin gas production there by yearend.

Exploration

Taiwan's Chinese Petroleum Corp. (CPC) extended Shihshang gas field in the Taiwan Strait off Taiwan's southern coast (OGJ, Feb. 20, 1995, Newsletter). CPC estimates its 5 Shihshang added at least 24.5 bcf of reserves, bringing the field total to 269.5 bcf. It plans to develop the field once identified reserves reach 350 bcf. The appraisal well was spudded Feb. 12 but suspended for 2 weeks early this month because of China's military exercises in the strait.

Amoco Egypt East Tanka BV 3 East Tanka new pool wildcat in 203 ft of water in the Gulf of Suez off Egypt flowed 4,884 b/d of 31^o gravity oil and 3.7 MMcfd of gas. The well cut 56 ft of net oil pay in Miocene Asl at 8,592-8,680 ft. Amoco plans stand alone development of the discovery with a small platform tied back to nearby October field, using that platform to drill several other prospects nearby that also could be tied back to the October complex. Amoco also plans to drill its 4 East Tanka wildcat from October E platform, targeting a separate structure southeast of 1 East Tanka discovery, now producing 2,500 b/d.

ARCO British Ltd. tested a significant gas find at its 48/17c-12 well in the southern U.K. North Sea, reported license partner Talisman Energy Inc., Calgary. Talisman said the well flowed 37 MMcfd of gas and 600 b/d of condensate. The strike is near several producing fields, suggesting it could be placed on stream quickly. License partners are operator ARCO 50% and Talisman and Oryx U.K. Energy Co. 25% each.Chevron Overseas Petroleum (Qatar) Ltd. signed an exploration and production sharing agreement with state owned Qatar General Petroleum Corp. to explore the 3,000 sq mile Block 1NW off peninsular Qatar. The block is near supergiant North Dome gas field and is prospective for crude oil. Plans call for a 3D seismic survey, followed by two wildcats. Interests are Chevron 60% and Hungary's state oil company MOL 40%.

Safety

U.K. Health & Safety Executive (HSE) published a report detailing methods for modeling flash fires caused by ignition of clouds of flammable gas. HSE said the report explains current methods for calculating rates of gas dispersion and the spread of flames. It identifies conditions for stopping or slowing the spread of flames and reviews how flash fires can escalate into explosions.

Companies

El Paso Natural Gas Co., El Paso, Tex., began doing business as El Paso Energy Corp. and realigned its operating units to increase focus on expanding nonregulated businesses. El Paso Natural Gas Transmission will take the name El Paso Natural Gas Co. and operate all regulated pipeline assets. A new subholding company will be formed in Houston to oversee El Paso's field and merchant services. El Paso Energy Development Co. will continue pursuing energy projects worldwide as El Paso Energy International Co.

Texaco Inc. formed an international exploration division to replace the company's central exploration department. The new division is intended to work seamlessly with Texaco's operating units and technology division to quickly apply best technology and operating practices in upstream core areas as well as in underexplored and frontier regions worldwide.

Pipelines

El Paso Energy Corp. asked the Federal Energy Regulatory Commission to approve a $20 million project to boost gas pipeline capacity by 180 MMcfd from San Juan basin in Northwest New Mexico to delivery points in West Texas' Permian basin by adding compression on El Paso Natural Gas Co.'s Havasu Cross-Over line. Five shippers have subscribed fully for the incremental capacity the expansion is to create by second quarter 1997.

U.S. Federal Trade Commission

and Phillips Petroleum Co. agreed to a consent order barring Enron Corp.'s sale of 830 miles of gas gathering lines in the Oklahoma Panhandle to Phillips. The order also bars Phillips from buying more than 5 miles of gas gathering pipeline in the panhandle from anyone during any 18 month period.

A 34 in. gas pipeline under the LaSalle river near Winnipeg, Man., ruptured Apr. 15 and caught fire under the riverbed. The explosion in the line operated by TransCanada PipeLines Ltd., Calgary, created a 175 ft fireball in the sparsely populated area. There were no injuries. The ruptured line is one of six owned by TransCanada serving the Winnipeg area. The blast occurred on the first day of an inquiry by Canada's National Energy Board into a series of pipeline ruptures related to stress corrosion cracking.

The proposed Express Pipeline Ltd. crude oil line from Alberta to Casper, Wyo., received right-of-way approval from the U.S. Bureau of Land Management on federal land in Montana and Wyoming. The line still requires state approval in Montana and Wyoming and federal approval in Canada from the National Energy Board. Calgary firms TransCanada and Alberta Energy Co. Ltd. are backing the project. Meantime, the Independent Petroleum Association of Mountain States will fight the Express line and says increased crude supply in the area will depress prices by as much as $4/bbl.

Alyeska Pipeline Service Co.

cut throughput to 700,000 b/d on the 1.5 million b/d Trans-Alaska Pipeline System after it detected a subsurface leak in the line during a routine inspection Apr. 20 at Pump Station 10 near Glenallen, Alaska. The amount of oil spilled could not be determined at presstime, but it is likely to be minor because Alyeska suspects the leak is in 6 in. bypass piping rather than on the 48 in. main line. As of Apr. 22, throughput was up to 800,000 b/d, and the leak had slowed to a rate of about 0.6-1.1 b/d from 3.4-4.6 b/d.

Environment U.S. Environmental Protection Agencyapproved Colorado's request to relax the volatility standard for gasoline sold in the Denver-Boulder area during 1996-97. EPA said the summertime Reid vapor pressure would be relaxed to 9 psi from 7.8 psi because the lower standard was not needed for ozone attainment and "would impose significant costs on industry and consumers."

Exports-imports

Canada's National Energy Board received eight applications for licenses to export 110 MMcfd of gas for terms of 5-20 years. Applicants include Coastal Gas Marketing Co., Renaissance Energy Ltd., St. Lawrence Gas. Co., and Talisman Energy Inc. The planned sales include markets in the U.S. Northeast and Northwest.