INDUSTRY BRIEFS

Pipelines

Amoco Corp. signed a $150 million agreement with Kazakhstan's state oil company to help finance the country's stake in the 900-mile Caspian pipeline to the Black Sea via Russia. By paying Kazakhstan's 19% share in the estimated $2 billion Caspian Pipeline Consortium project, Amoco gains the right to export 60,000 b/d of oil in the pipeline, when operational. The pipeline may be finished in 2010, if delays can be resolved (OGJ, Dec. 16, 1996, p. 22). The deal does not provide Amoco with an equity share in the pipeline.

Maritimes & Northeast Pipeline Ltd., a unit of West Coast Energy Inc., Vancouver, B.C., signed a precedent agreement to deliver 90 MMcfd of gas to Nova Scotia Power Inc., subject to approval and construction of needed facilities. The deal marks the second for Maritimes, following a 25 MMcfd agreement with New Brunswick Power Corp. last year. The proposed 729-mile pipeline will carry gas from Sable Island, off Nova Scotia, to New Brunswick and New England markets (OGJ, Feb. 10, 1997, p. 34). The Canadian segment of the pipeline will be operated by West Coast; the U.S. segment is operated by PanEnergy Corp., Houston.

Transcontinental Gas Pipe Line Corp., Houston, in April plans to file for Federal Energy Regulatory Commission (FERC) approval of its proposed Pocono expansion, which would add 4 miles of additional 36-in. loop pipeline and increase capacity by about 35 MMcfd from its Leidy hub in Pennsylvania to delivery points west of the Delaware River regulator in Northampton County, Pa. Transco's Leidy line currently ships about 2.2 MMcfd of gas; the Pocono expansion has a projected in-service date of Nov. 1, 1997, pending FERC approval. Construction is to begin in third quarter 1997.

Environment

Conoco Inc. agreed to restore 41 acres of stream side habitat in the Calcasieu basin near Lake Charles, La., as restitution for a spill 7 miles away, the U.S. Justice Department said. A Conoco pipeline leak spilled 1.6 million lb of ethylene dichloride in the Calcasieu River in March 1994. Conoco cleaned the area, which is expected to be returned to its pre-spill condition within 3 years.

Chevron U.S.A. Production Co. reached agreement with the U.S. Justice Department to pay $1.165 million for violations at the company's Platform Grace, off Carpinteria, Calif. Violations involved a safety valve, which did not meet Minerals Management Service (MMS) standards for 3 months during 1994. No environmental damage resulted. Chevron shut down the platform after MMS informed the company in September 1994 that the valve was out of compliance. Chevron said it tightened valve testing and maintenance procedures after conducting an internal investigation.

U.S. Environmental Protection Agency issued a rule amending its screening process for determining applicability of hazardous emission rules on gasoline distribution facilities. The changes implement an agreement with the American Petroleum Institute, which had challenged the regulations.

Petrochemicals

M.W. Kellogg Co., Houston, a unit of Dresser Industries Inc., Dallas, will provide basic engineering and technology licensing for a 90,700-metric ton/year grassroots plastics plant at Mailiao, Taiwan, for Nan Ya Plastics Corp., a unit of Formosa Plastics Group. The complex will utilize Dow Chemical Co.'s bisphenol-A technology. Kellogg holds the exclusive worldwide license rights to the technology. The process provides high-quality feed for making polycarbonate products at low capital and manufacturing costs. A start-up date was not disclosed.

Exxon Chemical Co. will proceed with a planned $2 billion petrochemical plant at Singapore. Exxon let contract to Japan's Chiyoda Corp. and an unidentified European partner to build the complex, according to press reports from Southeast Asia. Exxon's new naphtha cracker, slated to be on stream by 2000, will have capacity to produce as much as 800,000 metric tons/year of intermediate chemicals, including 500,000 tons/year of ethylene.

Shell Nederland Chemie BV plans to start construction this spring of a state-of-the-art plant to produce rigid polyols at its Pernis plant in the Netherlands. Shell said the 45,000-metric ton/year plant will cost more than $30 million. It is expected to come on stream in 1998. The plant's output will be used primarily for a range of insulation applications.

Phillips Petroleum Co., Bartlesville, Okla., disclosed its proprietary metallocene catalyst technology, which extends manufacturing control over the molecular structure and properties of polyethylene, proved commercially successful in producing linear low-density polyethylene (Lldpe). When used in Lldpe production, the catalyst will produce a film of exceptional clarity and strength, ideal for food packaging, Phillips said. The catalyst, tested using Phillips' slurry loop process, will enable Phillips to enter the Lldpe market using its existing plants and technology.

Italy's Montell Polyolefins and Taiwan Polypropylene Co. Ltd. signed a memorandum of understanding to set up a company to make and sell polyolefins in Hong Kong and China. Products will include polypropylene-based compounds and advanced materials. The venture intends to begin construction of a 6,000-metric ton/year plant at Hong Kong during the second quarter.

Terminals

Shell Pip Line Corp., Houston, signed a 20-year agreement to commercialize and operate the Strategic Petroleum Reserve's St. James, La., marine terminal on the Mississippi River for the U.S. Department of Energy. Shell's lease includes a 2-million-bbl capacity, six-tank terminal, as well as DOE's 37-mile, 36-in. pipeline to the Bayou Choctaw storage site near Baton Rouge. Shell renamed the terminal complex Sugarland St. James Terminal. The agreement was effective Jan. 31, 1997.

Drilling-production

Elf Petroleum Qatar began oil production from Alkahalij field on Block 6 off Qatar. Initial production of 6,000 b/d is expected to reach 30,000 b/d by yearend. Oil reserves are estimated at 80 million bbl. Six production wells have been tied back to three shallow water tripod platforms; more wells will be drilled during subsequent field development. Oil is moved through a 42-km pipeline to Halul Island for treatment and export at the Qatar General Petroleum Corp. (QGPC) terminal. Operator Elf has a 55% interest, and Agip International BV a 45% share in a production contract with QGPC.

Marathon Oil Co., Houston, let contract for an undisclosed sum to ABB Offshore Technology AS, Sandnes, Norway, for subsea development of the Arnold find in the Gulf of Mexico. Arnold lies in 1,749 ft of water on Ewing Bank Block 963. It will be tied back to the Lobster platform, which is about 7 miles away in about 800 ft of water. ABB will perform design, manufacturing, and installation of the manifold and flow lines.

Saga Petroleum AS, Oslo, let a $7 million contract to Stolt Comex Seaway SA, Aberdeen, for installation of a mooring system for the oil production and storage vessel to be used in development of Varg field off Norway. The contract covers engineering, procurement, and installation of ten, 72-in. diameter pile anchors. The Seaway Eagle construction vessel will install the anchors and associated mooring legs beginning in July.

Oil Search Ltd., Papua New Guinea (PNG), estimates Moran field oil reserves in the PNG highlands is potentially larger than nearby Kutubu field reserves, which total 300 million bbl. Moran, discovered in 1996, is slated to come on stream in third quarter 1997. Initial output of 10,000 b/d is expected, increasing to 30,000 b/d when compressors are installed early in 1998. Oil Search is part of the Chevron Corp.-led Niugini group (OGJ, Feb. 24, 1997, p. 44). It will participate this year in two new Moran wells, Moran 3X and 4X.

Unocal Thailand Ltd. signed an agreement with the Thai Ministry of Industry for a supplementary concession to farm into Block B10/32 in the Gulf of Thailand. The agreement came after the company spudded West Dara-1 exploratory well in the northern portion of the block. The well tested at a rate of 10 MMcfd of gas and 84 bbl of condensate on a 3/4 in. choke. Unocal's Thai unit now has a 45% interest in the block, adjacent to the company's main natural gas concession areas in the Thai gulf. Statoil Siam Ltd. will retain a 45% interest, while Japan's Mitsui Oil Exploration Ltd. holds the remaining 10%.

Algeria's state-owned oil company Sonatrach signed a unitization agreement with Louisiana Land & Exploration Co., New Orleans, and Talisman Energy Inc., Calgary, covering development of Blocks 405, 406a, and 404a in a field now known as ORD/BKE. Partners are drilling MLN-3 delineation well at MLN field on Block 405, where discovery well MLN-1 tested at a rate of 15,850 b/d of oil and 61 MMcfd of gas (OGJ, July 22, 1996, p. 58). In December 1996, delineation well MLN-2 tested 3,400 b/d of oil and 9 MMcfd of gas. The first exploratory well on Block 215 is planned in spring 1997.

Oil & Gas Asset Clearinghouse, Houston, will auction 2,000 oil and gas properties on Apr. 16, 1997, at Midland, Tex. Offerings include: Houston's Burlington Resources Inc.'s holdings in Avalon and McMillian Upper Penn fields in Eddy County, N.M.; Midland's Parker & Parsley Petroleum Co.'s interest in Petersen field in Roosevelt County, N.M.; Phillips' holdings in Hobo field, Borden County, Tex.; and Marathon's Ross Ranch field in King County, Tex. Information is available for review in Clearinghouse data rooms at Midland and Houston from Mar. 17-Apr. 11.

Companies

PT Smelting Co., East Java, let contract to BOC Gases (BOC), Murray Hill, N.J., a unit of U.K.-based BOC Group, to supply oxygen and electric power for Indonesia's first copper smelter and refinery at Gresik, East Java. BOC will invest about $95 million to assist Indonesian partner the Garama Group install the country's largest air separation plant, with an oxygen capacity of more than 1,000 metric tons/day. BOC and Garama also will form a company to supply steam and electricity. A power plant, to be built by Black & Veatch, Kansas City, Mo., will be fueled by natural gas and steam recovered from the smelting process. Both plants will come on stream in second half 1998.

Ashland Inc., Ashland, Ky., and its Blazer Energy Corp. unit, formerly Ashland Exploration Inc., filed with the U.S. Securities and Exchange Commission for an initial public offering of 3.1 million shares of Blazer's common stock. When the offering is complete, Ashland will own 82.3% of Blazer's common stock. Ashland plans to spin off remaining Blazer shares in a tax-free distribution to shareholders, once a ruling is obtained from the Internal Revenue Service.

Ramco Energy plc, Aberdeen, plans a share offering on the American Stock Exchange to raise $77.6 million, earmarked for purchasing interests in oil and gas prospects in Azerbaijan, Georgia, and Kazakhstan, as well as funding exploration and development in these countries. Ramco is a partner in Azerbaijan International Operating Co., which is currently developing Chirag, Azeri, and Gunesh* fields off Azerbaijan (OGJ, Jan. 30, 1995, p. 31).

LPG

Mobil Asia-Pacific Ltd. entered a joint venture with Pakistan's Army Welfare Trust to build an LPG terminal at Port Qasim near Karachi. Mobil will invest an estimated $45 million, while the Army Welfare Trust will hold a stake of about 20% in the terminal. Mobil plans to export LPG from Pakistan to Iran and Afghanistan; neither capacity nor a completion date for the terminal was disclosed.

Power

Malaysia's Segari Energy Ventures Sdn. Bhd. began commercial operation of the country's largest power plant at Lumut on the west coast. The $1.6 billion plant, built under a turnkey contract by ABB Power Generation Ltd., Baden, Switzerland, is a combined-cycle, gas-fired plant with capacity to generate 1,300 MW of electric power. State-owned Petroliam Nasional Bhd. provides feed gas by pipeline. The plant increased Malaysia's total power generation capacity by 11%.

British Gas International plans to invest more than $1.5 billion in power-generation projects in India, as well as in the distribution and sale of liquefied natural gas (LNG), according to U.K. press reports. British Gas, which seeks to build a 615-MW power plant in the western Indian state of Gujarat, also wants to import and distribute LNG in collaboration with state-owned Gas Authority of India Ltd.

LNG

Pertamina, Indonesia's national oil company, signed financing agreements totaling $1.7 billion for the eighth liquefaction train at its Bontang plant (OGJ, June 10, 1996, Newsletter). The new train will begin producing 2.95 million metric tons/year in December 1999. It will supply Taiwan and South Korea and raise total plant capacity to 21.6 million tons/year. France's Total will supply about 75% of the gas requirements using Handil, Bekapai, Tambora, and Tunu field output.

Exploration

Mobil North Sea Ltd. disclosed the 48/12d-9 exploration well on U.K. southern North Sea Block 48/12d, north of Excalibur field, tested more than 30 MMcfd of gas. License interests are held by operator Mobil 75% and Brabant Petroleum Ltd., Tonbridge, U.K. 25%. Development options will be evaluated.

Agip SpA unit International Egyptian Oil Co. (IEOC) made a gas discovery in 82 ft of water on Timsah Block in the Nile Delta. IEOC's Abu Seif-1 well tested 10.2 MMcfd of gas. It was drilled near Waqar gas field on IEOC's neighboring North Port Said Block. The license is held 50% by IEOC and 50% by Amoco Corp., which recently disclosed the latest in a string of Pliocene gas finds (OGJ, Feb. 24, 1997, p. 37).

Copyright 1997 Oil & Gas Journal. All Rights Reserved.