INDUSTRY BRIEFS

Energy marketing

Williams Energy Group, Tulsa, and Boston Edison Co. signed a letter of intent to form an alliance to market electricity, natural gas, and other hydrocarbon-based fuels and provide related services to New England customers. The Boston-based alliance will combine a national full-service energy company with a regional electric utility to create an equally owned, limited-liability corporation. Williams will supply wholesale energy products for marketing by the alliance. Combined initial capital investment will be less than $10 million. Target operational date is January 1997.

NGL

Koch Hydrocarbon Co., Wichita, agreed to buy NGC Corp. unit Warren NGL Inc.'s 80% interest in the 110,000 b/d Mont Belvieu I fractionation complex at Mont Belvieu, Tex. Union Pacific Resources Group Inc., Fort Worth, owns the remainder. Sale, effective Jan. 1, 1997, is subject to Federal Trade Commission (FTC) approval. It is part of an FTC agreement with NGC to divest its Mont Belvieu I interest in order to close NGC's merger with Chevron Corp.'s midstream business.

Refining

India's Essar Oil Ltd. let a $500 million contract to Asea Brown Boveri Ltd. to supply equipment for and manage construction of a 180,000 b/d refinery at Jamnagar in western Gujarat state.

LPG

Chevron Overseas Petroleum Inc. christened the world's first steel liquefied petroleum gas floating storage and offloading (FSO) vessel, Escravos LPG FSO, for the Escravos gas project, scheduled for May 1997 start-up off Nigeria (OGJ, Nov. 27, 1995, p. 77). The vessel, designed to operate for 20 years without drydocking, will be towed from Nagoya, Japan, to Nigeria for installation and commissioning. The FSO will chill, depressurize, and store LPG for export on LPG tankers for Chevron Nigeria and joint-venture partner Nigerian National Petroleum Corp.

Drilling-production

Azerbaijan's Shah Deniz prospect in the Caspian Sea will be further appraised in a 3-year program budgeted at $100-150 million. Work will include more than 800 sq km of 3D seismic and two wells. Azerbaijan's Parliament last month ratified a contract to further explore and develop the field (OGJ, Oct. 21, p. 22). Interests are BP Exploration Operating Co. Ltd. and Den norske stats oljeselskap AS 25.5% each; Elf Aquitaine SA, Lukoil, Oil Industries' Engineering & Construction, and State Oil Co. of Azerbaijan Republic 10% each; and Turkey's TPAO 9%.

South Africa's Mossgas (Pty.) Ltd. let a $63 million contract to Coflexip Stena Offshore SA, Paris, to develop a satellite gas discovery near Mossel Bay field. The project will involve completing three existing wells and drilling a fourth, then bringing them into production with subsea wellheads tied back to Mossel Bay FA production platform. Modifications to the host platform will be carried out by Kvaerner Oil & Gas Ltd., Aberdeen.

Benton Oil and Gas Co., Carpinteria, Calif., tested the high volume horizontal pilot well TEX-59 drilled in the Tucupita field unit in Venezuela. The well flowed 23,483 b/d of oil with no water on a 12 hr initial test. The sustainable rate of daily production cannot be determined until additional testing is completed. Initial output will be limited to 2,500-3,000 b/d. The field was shut in due to high water production in 1985. A unit of Benton operates the field under an agreement with Lagoven SA, a unit of Petroleos de Venezuela SA.

Asamera (Overseas) Ltd., a Gulf Canada Resources Ltd. unit, drilled 2 Sumpal about 1.9 miles from the 1 Sumpal discovery on Indonesia's Corridor Block (OGJ, May 8, 1995, p. 78). The well tested at a maximum rate of 10.2 MMcfd through a 1-in. choke from pay at 8,303-8,418 ft. Interest owners in the production sharing contract are operator Asamera 54%, Talisman (Corridor) Ltd. 36%, and state-owned Pertamina 10%. Gulf Canada and Talisman said 2 Sumpal proves hydrocarbons exist 2,182 ft deeper than previously tested and indicates a gas column of at least 2,461 ft.

Shell Development (Australia) purchased a 10% interest in the Thevenard Island oil field development project off Western Australia from Western Mining Corp. (WMC), Melbourne. Acquisition includes WMC's stake in the Saladin, Roller, and Skate fields in the Carnarvon basin. The deal is part of WMC's plan to sell virtually all of its petroleum interests (OGJ, Sept. 16, p. 27).

India's Oil and Natural Gas Corp. (ONGC) let a $40 million contract to Ingersoll-Rand Co., Woodcliff Lake, N.J., to supply air compressors and related infrastructure for an enhanced oil recovery project at Santhal, India. The project, slated for completion by 2000, will use an in-situ combustion process developed by ONGC to reduce crude viscosity. Ingersoll-Rand will supply six primary and six secondary booster air compressors, as well as motors, air exchangers, pressure vessels, interconnecting pipes, controls, and instrumentation.

Alberta Energy and Utilities Board may order closure of 547 wells operated by 149 companies because the companies have not filed reports on tests required to ensure that no sour gas is escaping and that no liquid contaminants are leaking into groundwater. If the required tests are not completed and reports filed within 30 days, the board will issue orders to abandon the wells. The Canadian Association of Petroleum Producers said companies will take necessary action quickly to ensure closure orders are lifted. Each well involved requires a packer isolation test.

M.L. Cass Petroleum Corp., Calgary, signed a letter of intent with Triton-Vuko Energy Group Ltd. to develop Karazhanbas onshore and offshore oil fields in Kazakhstan. M.L. Cass will pay development costs, including Triton-Vuko's 10% share. After payout of 130% of capital costs, Triton-Vuko will hold 40% and M.L. Cass 60%. Cass also will take a one-third interest in Espoir field off Cote d'Ivoire. Both deals require additional approvals before closing.

Companies

Esso Sekiyu KK and Mitsubishi Oil Co. will cut staff as downstream industry restructuring continues in Japan (OGJ, Aug. 26, p. 31). Esso plans a reduction of about 16%, representing 170-180 positions, by the end of December. About 150 workers have elected to take early retirement. Remainder will be those scheduled for retirement this year. Esso has decided to no longer hire mid-career workers, but will continue recruiting new graduates. Mitsubishi seeks 100 voluntary retirees by yearend.

MRT Energy, a venture of Ramco Energy plc, Mobil Oil Corp., and Total, will jointly evaluate exploration and production opportunities in Azerbaijan. Interests are held by Aberdeen-based Ramco 20%, Mobil 40%, and Total 40%. Ramco is a member of Azerbaijan International Operating Co. group developing unitized Azeri, Chirag, and Guneshli fields. The 1 Chirag appraisal, the first well to be drilled by western companies in the Caspian, is drilling ahead in the ACG Unit.

Estonia's privatization agency will sell all but 10% of its remaining 39.3% stake in Estonian Gas. The other owners of Estonian Gas include Russia's Gazprom 30%, Germany's Ruhrgas AG 15%, various investment funds 10%, and 115 small shareholders 5.1%.

Terminals

Ukraine plans to build a terminal at the Black Sea port of Kherson to handle 40,000-120,000 b/d of crude under a $50-75-million project that includes modernizing Kherson refinery.

Exploration

Norway's Ministry of Industry & Energy offered 45 blocks in the Barents Sea for exploration licensing. Companies have until Feb. 5, 1997, to apply for licenses, with awards expected in March or April. Although significant gas finds have been made in the Barents, they are not commercial because of distance from markets (OGJ, Oct. 21, p. 22). The government loosened its licensing terms slightly for this area, and companies recently pooled their exploration results in a bid to find the oil that is crucial to reviving the play.

Enron Oil & Gas Co. (EOG) tested 1 OCS-G 14467 in about 70 ft of water on Eugene Island Block 135 off Louisiana. The well, drilled to 18,300 ft TVD, encountered two zones below 17,000 ft. The Miocene Cristellaria K sand flowed at a rate of 16.5 MMcfd of gas and 650 b/d of condensate through a 20/64-in. choke with 9,050 psi flowing tubing pressure. EOG is evaluating development of the block, with initial production anticipated by fourth quarter 1997. EOG has a 50% working interest and is operator.

Clyde Petroleum Exploratie BV, The Hague, found gas with its M7-5 well off the Netherlands. The well flowed on test at a stabilized rate of 29.8 MMcfd and has been suspended as a potential producer. The company expects to apply for a production license soon. Interest holders, prior to state participation, are operator Clyde 27.5%, Nederlandse Aardolie Maatschappij BV 62.5%, and DSM Energie BV 10%.

Snyder Oil Corp., Fort Worth, is designing a platform and facilities for Main Pass Block 261 in the Gulf of Mexico. Appraisal well 2 Main Pass 261, drilled to TVD of 13,600 ft, logged about 140 feet of apparent pay in multiple sands. The well flowed on test at a rate of 30 MMcfd of gas and 721 b/d of condensate through a 36/64-in. choke with 4,305 psi flowing tubing pressure. Further testing is planned uphole.

Abacan Resource Corp., Calgary, is drilling the 2 AJE appraisal well after a production test of its Benin basin 1 AJE wildcat on OPL block 309 in 328 ft of water, about 19 miles off Nigeria near the Benin border. The 1 AJE flowed 5,500 b/d of oil and condensate with associated gas from Turonian zone perforations. Abacan said seismic identified the deeper Abbian and Ise formations, which it also will test. Abacan said 1AJE could open a new Nigerian exploration area.

Kappa Energy Co., Calgary, plans to reappraise a previously uneconomic oil discovery on a 750,000-acre block in Yemen. The company will conduct a minimum 155 miles of seismic and drill one exploratory well to test the prolific Qishn sandstone, where Calgary's Canadian Occidental Petroleum Ltd. has had considerable success.

Exports-imports

Russia's Gazprom will deliver 281 bcf of natural gas to Romania and export another 871 bcf to third countries via Romania in 1997. Volumes will increase to 492 bcf and 1.78 tcf by 2010.

Pipelines

Alliance Pipeline Ltd., Calgary, extended an open season on its proposed $3.6 billion (Canadian), 1,864 mile natural gas pipeline from British Columbia to Chicago. After meeting with more than 100 potential shippers, Alliance said that heavy demand for space prompted it to extend the open season by 1 week to Nov. 8. The company requires minimum bookings of 1.25 bcfd to support the project.

Colonial Pipeline Co., Atlanta, and Reinauer Transportation Co., Staten Island, N.Y., formed a strategic alliance to transport products from the Gulf Coast to New England, beginning next spring. Colonial ships more than 16.5 million gal/day of products to a terminus at Linden, N.J. Reinauer barges some of the same fuels from New York harbor to upstate New York and New England seaports. The alliance will provide customers a "one-stop shop," enabling products to be nominated straight through from Colonial origins on the Gulf Coast to ports served by Reinauer.

Cogeneration

Westcoast Power Inc., Vancouver, B.C., and Fletcher Challenge Energy Inc. will build a $200 million (Canadian) gas-fired cogeneration plant near Campbell River at Vancouver Island, B.C. B.C. Hydro has agreed to buy 240,000 kw of electricity from the plant, which will be owned 60% by Fletcher Challenge and 40% by Westcoast. The plant also will provide steam for a pulp and paper mill at Elk Falls, near Campbell River.

Alternate fuels

South Africa's Sasol Synthetic Fuels (Pty.) Ltd. let a $90 million contract to Japan's Hitachi Zosen Corp. and Marubeni Corp. to build seven advanced synthol reactors. These will be installed at Sasol's coal-based synthetic fuels plant to replace 16 circulating fluid bed reactors. Project completion is slated for December 1998. The 1,600-ton reactors are expected to be the biggest coal gas-to-liquids products reactors in the world.

Petrochemicals

Saudi Basic Industries Corp. (Sabic) will build a world-scale ethylene glycol plant at its Al Jubail complex. The 497,000 metric ton/year plant will take Sabic's ethylene glycol production capacity to more than 2 million tons/year by 2000. The company also will debottleneck two linear low density polyethylene plants at Al Jubail to raise combined capacity to 750,000 tons/year, bringing Sabic's ethylene production capacity close to 3 million tons/year. The projects are part of a plan to raise Sabic's total petrochemical capacity to 25 million tons/year by 2000 from the current 20 million tons/year.

Morocco's Cherifien des Phosphates (OCP) and Pakistan's Al Noor Fertilizer Industries Ltd. have signed a $220 million joint-venture agreement to build a fertilizer plant at Karachi. The plant is scheduled to come on stream in 1998 and have a capacity of 1,200 metric tons/year of urea and 955 tons/year of ammonia. OCP will provide technical and marketing advice and meet all of the plant's demand for phosphoric acid from Morocco. Asian Development Bank, Manila, and Britain's Export Credit Guarantee Department will finance the deal.