LNG
Tuntex Distinct Corp., Taiwan, plans to build a $2 billion liquefied natural gas storage terminal in northern Taiwan. The first of three stages is to be completed by 2002 at a cost of $1.5 billion (U.S.). When completed in 2007, the terminal will have capacity for as much as 6 million metric tons/year of LNG. Chinese Petroleum Corp. and Taiwan Power Co. reportedly are interested in the project, and each could take 10-20% interest.
Oil shale
Suncor Inc., Calgary, and partners are rethinking financing of an initial $220 million (Canadian) investment in an Australian oil shale project near Gladstone, Queensland, after the Australian government canceled a program that allowed investors a 150% write-off for each dollar spent on R&D. Suncor, Southern Pacific NL, and Central Pacific Minerals NL-already involved in engineering and commercial negotiations for a 4,500 b/d oil extraction plant-are to decide by yearend whether to proceed with the first phase. Project investment in the next decade could total $2.5 billion.
Petrochemicals
China National Petrochemical Corp. let contract to Brown & Root Inc. for process technology and design and technical services for an expansion of ethylene capacity at its Daqing petrochemical complex in Heilongjiang province, China. The revamped plant will use Brown & Root ethylene technology featuring front-end, heat-pumped depropanization integrated with cracked gas compression and a front-end acetylene hydrogenation system to boost capacity by July 1999 to 480,000 metric tons/year from 300,000 tons/year.
Lyondell Petrochemical Co., Houston, shut down operations at its Channelview, Tex., petrochemical complex July 27 after a fire in an ARCO Pipe Line Co. pipeline extensively damaged the line and Channelview's electrical systems. At presstime, officials still were investigating the incident, and Channelview process units remained idle. Lyondell said it could take 2-4 weeks to resume full production at the complex. Main products produced at Channelview include ethylene, propylene, methanol, methyl tertiary butyl ether, benzene, and toluene.
Total abandoned plans to build jointly with Amoco Corp. a 350,000 ton/year paraxylene plant at one of Total's refineries in Northwest Europe, after recent market trends convinced the two companies that economic conditions wouldn't justify the project. The decision won't affect either company from individually pursuing similar projects in the area. Total produces about 110,000 tons/year of paraxylene at its Gonfreville, France, refinery.
Refining
Tosco Corp., Stamford, Conn., conditionally approved a plan to reopen the former 180,500 b/d BP Oil Co. Marcus Hook refinery at Trainer, Pa. Key to the $100 million program is reaching satisfactory agreements with organized labor and obtaining necessary permits from government regulatory agencies. Tosco also plans to modernize the refinery and revamp all processing units in the next year, reconfiguring it to a 150,000 b/d refinery.
Drilling-production
Brazil's Petroleo Brasileiro SA will surpass its own water depth record for oil production with a Campos basin well in more than 4,550 ft of water, 115 km off Macae, Brazil. Based on preliminary tests, Petrobras thinks the well will produce about 6,300 b/d of oil and estimates reserves at 30 million bbl. The state company's current water depth mark for oil production is held by another Campos well in 3,370 ft of water.
Mobil Corp. agreed in principle with Indonesia's Pertamina to acquire 26% interest in Natuna D Alpha production sharing contract for Natuna gas field in the South China Sea. The farmout commits Mobil to work with operator Esso and Pertamina in predevelopment of Natuna, where reserves are estimated to be at least 46 tcf. Based on development options under study for the field, Natuna gas could begin serving export markets early next century either through a phased liquefied natural gas project in the field, LNG facilities at Indonesia's Arun field, or an integrated Asian gas pipeline grid.
Agip (U.K.) Ltd. agreed to pay Sun Co., Philadelphia, $260 million for its international exploration and production assets, including properties in the U.K. North Sea that produce 27,000 b/d of oil and 36 MMcfd of gas. The deal, which includes related pipelines and onshore facilities and Balmoral floating production vessel, is to close in September.
Northrock Resources Ltd., Calgary, paid $105 million (Canadian) for Inland Oil and Gas Ltd. unit of BC Gas Inc., Vancouver, B.C. Northrock plans to retain former Inland gas properties in the Foothills region north of Calgary and sell other Inland properties to NCE Petrofund Corp. for $33 million. The deal is expected to add 5,000 b/d of oil equivalent (boed) in the next year to Northrock's current output of about 10,000 boed.
Oryx Energy Co. and Ranger Oil (U.K.) Ltd. agreed to pay Chevron U.K. Ltd. $140 million combined for all its interests in Ninian, Hutton, Lyell, and Murchison fields, Columba B and E terraces, and surrounding acreage in the U.K. North Sea. Oryx expects to become Ninian operator and lower field costs by reducing manpower, broadening job definitions, and using more contractors to operate and maintain facilities. Such measures in place at Hutton, Lyell, and Murchison are expected to trim $1/bbl from production costs by yearend.
Pacalta Resources Ltd., Calgary, agreed to pay Ecuador's Grupo Granda (GG) $40 million for GG's 40% interest in an Ecuadorian oil project. Pacalta already owns 60% of City Investing Co., which is reworking 14 oil wells and exploiting other reserves on a 109,000 acre block in Ecuador. City has increased production on the tract to 6,300 b/d from about 4,000 b/d since March, when it bought an interest in the project.
Mobil North Sea Ltd. let a 5 year contract to an Aberdeen venture of AOC International Ltd. and Hopkinson Engineering Services Ltd. for overhaul management, procurement, maintenance, and repair of valves on Mobil's Beryl A and B platforms in the U.K. North Sea and at its St. Fergus gas plant north of Aberdeen.
Conoco (U.K.) Ltd. plans to convert its Viking B complex in U.K.'s southern gas basin to unmanned operation the next 2 years at an estimated cost of $7.5 million. By 2000, Conoco aims to have Viking B operations remotely operated from Theddlethorpe gas terminal in Lincolnshire. Some of Viking B's crew of 60 will be kept on to operate and maintain the platforms from shore, extending the productive life of the field. The company also plans to remove four of five platforms in nearby Viking A complex (OGJ, June 3, p. 20).
Occidental Petroleum Corp. sold its oil royalty interests in the Congo for $215 million to the government as part of the nation's overall financial restructuring plan. Oxy, which acquired the royalties in 1993, continues to hold exploration rights to two tracts in the country.
Exploration
Amerada Hess Ltd.'s wildcat on Block 20/5c in the U.K. North Sea flowed 8,647 b/d of light oil through a 2 in. choke. The well, near Buchan field, was cased and suspended. Plans call for further appraisal, reported 20% interest owner Talisman North Sea Ltd., a unit of Calgary's Talisman Energy Inc.
Mobil Corp. and partners are preparing an initial exploration program expected to cost about $30 million for an 1,800 sq km area in Venezuela's La Ceiba block, on which the group acquired a production sharing contract in a bidding round this year. Partners in the next 3-5 years plan to collect seismic data over the area and drill three 18,000 ft wildcats. La Ceiba operator Mobil has 50% interest in the tract, Veba Oel 30%, and Nippon Oil 20%.
Enron Oil & Gas International let contract to PGS Ocean Bottom Seismic unit of Petroleum Geo-Services ASA, Oslo and Houston, for two large 3D marine surveys in the Caribbean Sea. Survey work off Trinidad, to begin this month, will be one of the first ocean bottom shoots in the region. PGS in a survey off Venezuela is to use a new source towing and shotline spacing technique suggested by Enron consultant Energy Innovations Technical Services Inc. that is expected to improve data acquisition efficiency.
Environment
Val Verde Corp., Crosby, Tex., a leading manufacturer of minirefineries, will test a new sludge remediation and oil recovery unit developed by Imperial Petroleum Recovery Corp., Alexandria, Va. Imperial has shipped the MST-4000 unit to a Crosby site south of Houston, where the two companies will set up a demonstration project. The unit uses high power microwave energy to separate oil, water, and solids from sludge, enabling reclamation of the hydrocarbons.
Amerada Hess Corp. let a $5 million contract to Foster Wheeler Environmental Corp. for environmental consulting services focusing on issues related to its refineries, terminals, and gasoline stations. The contract includes site assessments and remedial engineering.
Spills
Canadian officials are preparing to raise the Irving Whale barge in about 220 ft of water off Prince Edward Island in the Gulf of St. Lawrence, where it sank in 1970 while carrying 4,200 tons of bunker C fuel oil and 7.5 tons of PCB oil. Leaks in the barge's hull have released about 1,000 tons of product in the past 25 years. The Canadian Coast Guard has made initial preparations for the lift, which was postponed last summer by bad weather and court challenges by groups opposed to the salvage project. Environmentalists contend any spill of PCBs would threaten the area's $300 million fishing industry.
ARCO Pipe Line Co. and Norco Pipeline Inc. agreed to pay $2.5 million to restore fish, wildlife, and other natural resources harmed by a September 1993 oil spill near the Indiana-Ohio border. U.S. Justice Department said the companies also will reimburse the government $289,000 for damage assessment costs related to the 30,000 gal diesel fuel spill into 7 miles of Fish Creek, spanning DeKalb County, Ind., and Williams County, Ohio.
Pipelines
Alberta's Energy and Utilities Board (EUB) began prehearings on a $35 million (Canadian) heavy oil pipeline project proposed by Gibson Petroleum Co. and ELAN Energy Inc., both of Calgary. The companies are seeking approval for a 12 in. line to move ELAN heavy oil produced in the Elk Point-Lindbergh area to Gibson's Hardisty, Alta., terminal. Husky Oil Ltd., Calgary, is seeking approval of a similar project to extend an existing pipeline in the same area. The board is conducting a technical review of the Husky project.
A Montana review board agreed to let Express Pipeline Ltd., Calgary, build a 305 mile oil pipeline across the state to deliver 172,000 b/d of Alberta crude by way of Casper, Wyo., to markets in the U.S. Midwest. The 24 in. line would enter Montana at Wildhorse on the Canadian border and exit south of Billings, Mont. Express also must show U.S. officials the company has at least $150 million available to deal with any spills or leaks. The $390 million, 800 mile Express pipeline is backed by TransCanada PipeLines Ltd. and Alberta Energy Co. Ltd.
Marketing
U.K. Members of Parliament (MPs) called for an investigation into claims oil companies discriminate against independent gasoline retailers. An all-party committee of MPs recommended the government's Office of Fair Trading look into claims wholesalers are selling gasoline cheaper to their own sites than to independents. Independent retailers have complained that a gasoline price war, in which majors have opted to sell fuel at similar prices to supermarkets, is squeezing them out of business.
Gas processing
Novagas Clearinghouse Ltd., Calgary, is planning a $22 million (Canadian), 40 MMcfd sour gas plant in the Caribou area northwest of Fort St. John, B.C., and lined up Norcen Energy Resources Ltd., Calgary, as the main producer client for the facility. The plant, the fifth processing project developed by Novagas, is the company's third in Northeast British Columbia. Westcoast Energy Inc., Vancouver, B.C., is building a smaller plant in the same area as the Novagas project but shelved Aitken Creek and Tumbler Ridge gas plant projects in the past year because of weak gas prices.
Gas marketing
South West Queensland unit (SWQ) producers agreed to sell 14.25 bcf/year of gas to MIM Holdings Ltd. to provide a base supply for Mica Creek power station at Mount Isa in Northwest Queensland. The 15 year sales contract, to begin April 1998, allows sales volumes to increase to as much as 23.75 bcf/year. SWQ producers are to hold 30% interest in a gas pipeline to Mount Isa from Ballera gas plant, which also will be expanded for the MIM deal. SWQ group also has a $175 million plant expansion and field development under way to serve new markets in Southeast Queensland.
Courts
Chevron Corp. will appeal a judgment last month by a state district court in Tulsa awarding Oxy U.S.A. an estimated $742 million in compensatory damages and interest in a 14 year old breach of contract lawsuit brought by Oxy predecessor Cities Service Co. against Gulf Oil Corp., which was later acquired by Chevron (OGJ, July 29, p. 54). Chevron contends jurors hearing the case were denied crucial evidence that would have exonerated Gulf-and by extension Chevron-and that the presiding judge took many decisions out of the jury's hands, including the amount of compensatory damages.
Copyright 1996 Oil & Gas Journal. All Rights Reserved.