INDUSTRY BRIEFS

Alternate fuels

Venezuela'sCongress approved a $1 billion joint venture to build three Orimulsion production modules in eastern Venezuela. Partners are Conoco Inc. 30%, Den norske stats oljeselskap AS (Statoil) 20%, and Venezuelan firms Bitor SA 40% and Jandis 10%. Each plant is expected to cost about $320 million. Venezuela hopes to boost output of the heavy oil/water/surfactant emulsion boiler fuel to 20 million tons/year by 2000. It exported 3.6 million tons in 1995, and Bitor has supply contracts with power plants in nine countries.

Exploration

Carigali-Triton Operating Co. (CTOC) extended one field and discovered another on Block A-18 in the Malaysia-Thailand Joint Development Area in the Gulf of Thailand. CTOC's 3 Cakerawala appraisal well flowed a combined 47 MMcfd of gas and 225 b/d of condensate from five intervals at 3,960-6,870 ft through various size chokes about 2 miles west of 1A Cakerawala discovery well. The 1 Bulan wildcat flowed a combined 36 MMcfd of gas and 123 b/d of condensate through 56/64-96/64 in. chokes from drill stem tests of three zones at 4,044-6,842 ft.

Gabon let an exploration and production permit to Chauvco Resources Ltd., Calgary, for a 561 sq mile onshore tract that includes the 1991 Remboue discovery. Undeveloped reserves in the permit area are estimated at 10-15 million bbl, with some upside potential likely through further delineation. Chauvco's permit includes a 3 year exploration period with an option for 2 more years.

Elf Congo sold 30% stakes to Esso Exploration & Production Congo and Shell Exploration & Production Africa BV in 3,830 sq km Mer Profonde Sud exploration permit area in as much as 1,000 m of water off Congo about 50 km west of N'Kossa field. Tract operator Elf Congo, which retained 40% interest in the 4 year exploration permit it won in May, and its new partners will collect seismic data over the area before devising a work program.

Marketing

U.S. Federal Trade Commission accused Quaker State Corp. of making false advertising claims for its Slick 50 auto engine additive and is to accept evidence in the case through its hearing process. FTC last year brought a similar complaint against STP Corp., which resulted in an $880,000 civil penalty.

Petrochemicals

Petronas and Mitsubishi Corp. through a joint venture appointed Foster Wheeler (Malaysia) Sdn. Bhd., Kuala Lumpur, basic engineering design consultant for Malaysia's first aromatics complex. The naphtha-based plant, to be completed by third quarter 1999 at Kertih on the eastern coast of peninsular Malaysia, will have capacity to produce 420,000 metric tons/year of paraxylene and 150,000 tons/year of benzene. Foster Wheeler is to do front end engineering design and retains an option to supervise engineering, procurement, construction, and commissioning contractors.

Abu Dhabi National Oil Co. (Adnoc) and Borealis AS, Copenhagen, formed a project group to start work on a $1 billion, grassroots ethylene cracker and twin train polyethylene plant at Ruwais, Abu Dhabi, near an existing oil and gas terminal. Slated for completion by 2000, the plant will have capacity to produce 450,000 metric tons/year of high density and linear low density polyethylene using Borealis' bimodal process, most of which is to be marketed in Southeast Asia and India. Adnoc is to own 60% interest and Borealis 40% in a PE production company and 50% each in a separate marketing joint venture.

Nova Chemicals Ltd. and Union Carbide Corp. let contract to Stone & Webster Engineering Corp. for technology licensing and project management of a third ethylene plant at Joffre, Alta. The 2 billion lb/year plant is scheduled for completion in 2000. Stone & Webster is to provide ethylene technology, process definition studies, design, detailed engineering, furnace procurement, and project design engineering.

BP Chemicals Ltd. at the end of October will take over operatorship from Imperial Chemical Industries plc (ICI) of a 90,000 metric tons/year low density polyethylene plant at Wilton, U.K., acquired by BP in 1982 but operated since by ICI under an agency agreement. About 100 ICI employees will transfer to BP, but there will be no staffing redundancies at the relatively small but profitable plant.

Taiwan's Chi Mei Corp., which earlier this year disclosed plans to move into upstream petrochemicals, will postpone plans to set up a styrene monomer plant in the U.S. It cites soft prices in the decision to temporarily shelve a project involving construction of $200 million, 500,000 metric ton/year SM plant either in Texas or Louisiana. Sources in Taipei say another factor contributing to the decision was the commencement of a joint venture of Chi Mei and South Korea's Samsung Group to build a 350,000 ton/year SM plant.

Drilling-production

Flores & Rucks Inc., Baton Rouge, La., agreed to buy interests in 13 producing oil and gas fields in the Gulf of Mexico off Louisiana for more than $100 million. Estimated net production is more than 7,200 b/d of oil equivalent, boosting F&R's output by about 30%. Disclosure of seller is subject to board approval of the sale.

Norsk Hydro Produksjon AS let a $215 million contract to Kvaerner AS, Oslo, for production topsides for Oseberg East platform. Kvaerner is to fabricate the topsides at its Egersund yard south of Stavanger, with delivery set for spring 1998. Hydro also let a $46 million contract to Aker AS, Oslo, for construction of a 180 m tall, 7,500 metric ton steel jacket for Oseberg East platform. The contract includes engineering, procurement, fabrication, and completion of jacket and piles. Aker is to start work on the structure in February 1997 at its Verdal yard, with delivery slated for May 1998.

Phillips Petroleum Co. ZOC and partners plan to spud 5 Bayu delineation well in the fourth quarter on Zone of Cooperation A Block 91-13 in the Timor Sea. That follows 4 Bayu appraisal well flowing at a combined rate of 14 MMcfd of gas and 530 b/d of condensate through a 56/64 in. choke with 990 psi wellhead pressure from drill stem tests of four zones above 10,850 ft TD, within a 260 ft gross hydrocarbon column with the same gas/water contact seen in earlier Bayu wells. Operator Phillips and affiliates hold 60% interest in ZOCA 91-13, Oryx (ZOC) Energy Pty. Ltd. 25%, and Hardy Timor Gas Ltd. 15%.

Saga Petroleum AS agreed in a letter of intent to Saipem SpA, Milan, to charter Scarabeo 6 semisubmersible drilling rig for 4 years beginning August 1997 under a $99,000/day day rate contract. Statoil committed to use the rig for one third of the contract period. Saga is to use the unit mostly for exploratory drilling off Norway.

British-Borneo Petroleum Syndicate plc, London, paid $23.75 million for the assets of Unocal North Sea Exploration Ltd., including 7% interest in U.K. North Sea Blocks 21/6 and 21/11 where operator Amerada Hess Ltd. is developing Durward and Dauntless discoveries, with production slated to begin in March 1997. Other assets acquired by British-Borneo in the deal include small shares in four other nonproducing fields and seven exploration licenses. Unocal Britain Ltd. retains operatorship of U.K. North Sea Heather field.

Norsk Hydro AS let a $30 million contract to Kvaerner Oilfield Products AS, Oslo, for subsea production equipment to be installed in Troll West oil field. The order includes christmas trees, controls, and connectors, as well as tools and equipment for installation and servicing.

Norsk Hydro let an $80 million contract to Coflexip Stena Offshore Norway to engineer, manufacture, and install 26 risers, each 800 m long, for development of Visund oil field in 280-380 m of water in the Norwegian North Sea. Ten of the risers will employ Coflexip's new Teta layer technology developed with major operators for use in deepwater/severe operating conditions. Installation is set for summer 1998 at Coflexip's Le Trait, Normandy plant. The Le Trait plant also will manufacture two integrated service umbilicals using Teta technology for the Visund project.

Gas processing

Algeria's Sonatrach let a $260 million contract to SNC Lavalin Group Inc., Montreal, to expand Rhourde Nousse natural gas complex. The project, to be completed in 1999, involves adding a gas gathering network, treating unit, and liquid petroleum gas extraction unit to existing facilities. Rhourde Nousse increased output will target mostly European markets and will be transported via the Maghreb-Europe pipeline.

European Commission agreed to fund research of a group led by AEA Technology plc, Didcot, U.K., of modeling natural gas liquid flows in process plants. The 4 year project aims to improve and validate tools for designing and operating NGL reactors. AEA's partners in the project include Netherlands' DSM Research, Germany's BASF AG, Italy's Enichem SpA, Finland's Kemira Oy, and Belgium's Praxair, and a number of universities.

Refining

Shell U.K. Ltd. plans to install a Shell Claus Offgas Treating (SCOT) unit at its Stanlow refinery at Ellesmere Port, U.K., at a cost of $24 million. The unit will boost waste gas sulfur recovery to 99.5% from 95% to bring the 240,000 b/d plant in line with new emissions legislation effective after 1998. Stanlow was the first U.K. refinery to make low sulfur diesel, which beginning in October across Europe must contain less than 0.05 wt % sulfur. Shell in the past decade has spent more than $750 million at Stanlow, including recent installations of two more sulfur recovery units and a wastewater treatment plant.

Adnoc chose UOP technology for a second hydro- cracker to be built at the Ruwais refinery. The 56,000 b/sd unit will key Adnoc's refinery expansion. The unit is to process straight run and cracked gas oils to jet and diesel by way of a two-stage flow scheme.

Companies

Ocelot Energy Inc., Calgary, proposed forming three new companies in its corporate reorganization. Caracal Income Resources Inc. would acquire and develop reserves and pay dividend discretionary cash flow to shareholders. Pajero Gas Corp. would focus on developing gas in the British Columbia foothills. Ocelot International Ltd. would focus on large domestic and international oil and gas projects. A shareholders meeting is scheduled Sept. 4 to approve the reorganization.

Russia's gas giant Gazprom reportedly dusted off plans to offer as much as 9% of its shares to international investors. The offering is set for October, after being postponed because of the Russian presidential election. President Boris Yeltsin's election victory is said to have revived international confidence in investment in Russia.

Pipelines

Canada's National Energy Board approved Interprovincial Pipe Line Inc.'s application to lay about 148 km of oil pipeline from a point near Edmonton to a point near Hardisty, Alta.; replace 12 km of pipeline at locations between Hardisty and Herschel, Sask.; and add, modify, or replace pumping units on the Calgary company's system. The expansion will increase Interprovincial system capacity to Chicago by 123,000 b/d at a cost of about $140 million (Canadian). Expected in-service date is second half 1998. Interprovincial has negotiated an agreement with Canadian producers to share expansion project risks in case of underutilization.

NEB approved a negotiated incentive toll settlement between Trans-Northern Pipelines Inc., Toronto, Ontario, and its shippers. Trans-Northern, owned one-third by Shell Canada Ltd., operates an oil products pipeline between Montreal and Nanticoke, Ont.

Marathon Oil Co. acquired a 28% interest and Texaco Trading & Transportation Inc. and Leviathan Gas Pipeline Partners LP 36% each in Poseidon Oil Pipeline Co. LLC, which is operating and expanding Poseidon pipeline system in the Central Gulf of Mexico. Terms of the deals require Marathon and Texaco to turn over to Poseidon 58 miles of 16 in. line extending from Ewing Bank Block 873-where Marathon and Texaco have production-to Ship Shoal Block 141. Poseidon phase one facilities since April have been transporting production from deepwater and subsalt fields in the central gulf (OGJ, Feb. 26, p. 30).

A joint venture of Malaysia's Petronas Dagangan Bhd. and Shell Malaysia Trading Sdn. Bhd. let a $53.5 million contract to a venture of Nichiman Corp. and Kumpulan Juruteknik Sdn. Bhd. affiliate of NKK International Pte. Ltd. to lay a 16 in., 130 km products pipeline from Shell's Port Dickson refinery 130 km to a storage terminal to be built in Klang Valley near Kuala Lumpur. The pipeline system is to transport jet fuel, gasoline, and diesel from Petronas' Melaka refinery to a new Kuala Lumpur airport being built at Sepang. The project, to be completed in summer 1997, includes two pumping stations, two product egress facilities, and interconnecting facilities at Melaka.

LPG

Bank of Taiwan will be the lead bank in an international group to provide a syndicated loan of $1.2 billion to Indonesia's Pertamina to finance construction of the company's eighth liquefied petroleum gas complex. Pertamina reportedly chose the Taiwanese bank because 60% of the plant's output will be sold to Taiwan Power Co.