Industry Briefs

Spills

A dynamite attack damaged Colombia's main export pipeline last week, disrupting the flow of crude from wells in eastern Colombia to the export terminal at Coveñas. The blast occurred along a northern stretch of the Caño Limon line and caused a spill of about 1,000 bbl of oil. More than 400 guerilla attacks have targeted the line since it started up in 1985 (see maps, OGJ, June 9, 1997, pp. 42-43).

Refining

Super Petroleum Co. (SPC), Pakistan, wants to purchase 150 acres from Port Qasim Authority, Karachi, for construction of a 135,000-b/d refinery. SPC is a unit of Switzerland's Supaveri Finance Holding Co., which appointed Veco Corp. project consultant and South Korea's LG Group turnkey contractor. Total project cost will be $1.8 billion. Supaveri will import about 130,000 b/d of crude and export products. Start-up is expected by Jan. 1, 2000.

Georgia
let a 30 billion yen contract to Japan's Marubeni Corp. and JGC Corp. to upgrade its only refinery, an obsolete 106,000-b/d plant at Batumi. Marubeni will help supply crude oil and assist in selling products. The contractors will replace major processing units and construct an adjacent 20,000-kw-hr power plant to supply needed electricity to Batumi.

Nigerian National Petroleum Corp.
(NNPC) let contract to Total SA to repair and manage for 3 years its dilapidated 110,000-b/d refinery at Kaduna. The contract, valued at $100-200 million, is part of a larger agreement between NNPC and Total for managing and restructuring Nigeria's downstream industry.

Sharjah Oil Refining Co.,
Sharjah, delayed commissioning of its 24,000-b/d refinery (OGJ, Jan. 15, 1996, p. 26). Procurement and utility problems will push start-up to January 1998 from October 1997. The refinery, originally 16,000 b/d, was moved from a Canadian site and expanded by 8,000 b/d. A second refinery, due to be shipped from Canada next year and expanded to 26,000, will be commissioned in October 1998. A third unit is scheduled for 1999 start-up.

Tesoro Alaska Petroleum Co.
agreed to purchase all of Unocal Corp.'s crude oil production from Alaska's Cook Inlet. Tesoro will process the crude at its 72,000 b/d Kenai, Alas., refinery. Unocal's Cook Inlet production is about 18,500 b/d. Terms of the agreement were not disclosed.

Cogeneration

U.K. Department of Trade and Industry granted consent to Saltend Cogeneration Co. to build and operate a gas-fired combined heat and power plant at the Saltend, Hull, petrochemical complex of BP Chemicals Ltd. Saltend Cogeneration is a joint venture of BP and U.S. electricity generator Ent- energy Corp. The 1,200-MW plant will provide steam and electricity for the chemical plant, with excess electricity delivered to the national grid.

Drilling/production

Unocal Corp.'s Attaka Echo platform off East Kalimantan, Indonesia, sank following a blowout and subsequent fire (OGJ, Aug. 25, 1997, p. 46). No casualties or oil spills occurred, but the 20-well platform was virtually destroyed, says Wild Well Control Inc. (WWCI), Spring, Tex. WWCI determined that a relief well will be required to control the blowout, and it will attempt a subsea intervention to re-enter and kill 19 shut-in production wells via subsurface safety valves.

A joint venture of
Productos Industriales Venezolanos SA (Pivensa) and SA Consultores CSC won the right to enter into an operating agreement with Petroleos de Venezuela SA (Pdvsa) in Venezuela's Mata area in eastern Anzo tegui state. Its bid was $125.7 million. The JV is required to spend $8 million in Mata during the next 3 years. Pivensa was co-bidder for the Mata area in an earlier bid that was disqualified (OGJ, Aug. 4, 1997, Newsletter, and June 16, 1997, p. 27).

Mossgas (Pty.) Ltd.
selected two contractors to compete for engineering design in development of E-M gas discovery in Mossel Bay, South Africa. The field will be developed to extend by about 6 years the supply of feedstock gas for Mossgas' synthetic fuels plant, which currently receives gas from F-A field (OGJ, Mar. 17, 1997, p. 24). Production from E-M, 49 km west of the F-A platform, is scheduled to begin in September 2000. One of the two contractors, Kvaerner Oil & Gas Ltd., London, said Mossgas took a novel approach by giving the competitors raw reservoir data at the outset.

Agincourt field
in the Carnarvon basin off Western Australia started production at 9,000 b/d of oil from one horizontal well, Agincourt No. 4-H. The well cut 750 ft of lateral pay in the Cretaceous Flag formation at about 6,000 ft, said operator Apache Corp., Houston. Apache owns a 22.5% interest in the field. Partners are: Ampolex (WA) Inc. 24%, Kufpec Australia Pty. Ltd. 19.3%, Novus UK (Harriet) Ltd. 12.5%, TAP (Harriet) Pty. Ltd. 12.2%, Hardy Petroleum Ltd. 8.4%, and Ampolex Varanus Pty. Ltd. 1%.

Tullow Oil plc,
London, received approval from the Pakistani government to develop Sara field on East Badin Extension Block B. Tullow will install a gas treatment plant in the field and a pipeline to nearby Guddu power station. Initial yield from the field is expected to be 20 MMcfd, which will replace imported liquid fuel currently burned at the plant. Tullow is drilling Metang-1 wildcat on East Badin Extension Block A and plans to spud a new-pool wildcat in Block B in September, targeting the Suri prospect.

Santa Fe Energy Resources Inc.,
Houston, started production from North Geragai field on Sumatra's Jabung Block. Production was expected to reach 5,000 b/d by the end of August and 8,700 b/d in the fourth quarter. On the same block, Santa Fe's Makmur No. 2 delineation well flowed 2,950 b/d of 48° gravity oil with flowing tubing pressure of 511 psi through a 48/64-in. choke.

Basin Exploration Inc.,
Denver, started production from two wells on Eugene Island Block 65 in the Gulf of Mexico off Louisiana. Current production is 51 MMcfd of gas and more than 1,700 b/d of condensate, approaching pipeline and facility constraints. Production is being restricted to 45 MMcfd of gas and 1,400 b/d of condensate.

Apache Corp.
tested its No. 41 horizontal well on Eugene Island Block 100 at 1,350 b/d of oil and 1.9 MMcfd of gas with flowing tubing pressure of 1,800 psi. Total production from the block is now 1,700 b/d. The well is being produced at a restricted rate of 1,000 b/d of oil and 1.3 MMcfd of gas. The well was drilled in 30 ft of water from an Apache platform off Louisiana.

Pipelines

El Paso Energy Corp. agreed to acquire all of Gulf States Pipeline Co.'s stock for about $39 million. Gulf States' principal asset is a 250-MMcfd, 175-mile gathering and transmission system in northwestern Louisiana. Gulf States will become a part of El Paso Field Services Co.

Fina Oil & Chemical Co.,
Dallas, purchased rights-of-way for its West Texas pipeline project with Holly Corp., Dallas (OGJ, Apr. 14, 1997, p. 89). Fina let contract to Universal-Ensco Inc., Houston, to design the 60-mile pipeline, which will connect Fina's Amdel pipeline to Holly Corp.'s product pipeline system. The Fina/Holly line will extend from Port Arthur and Wichita Falls, Tex., through Tucson and into the Four Corners region and have a capacity of 155,000 b/d.

Nova Gas Transmission Ltd.,
Calgary, says gas shipments in its Alberta pipeline system averaged 12.3 bcfd in first half 1997, up 2.7% from first half 1996. Gas shipped to Alberta export points increased 2.6% to 1.9 tcf during the period. Exports to the western U.S. increased 8.6% to 443 bcf. Exports to central Canada and the eastern U.S. and Midwest markets from the Empress, Alta., border point increased 0.9%. Exports from the McNeill, Alta., border point to the U.S. Midwest declined 1.1%. Gas shipped within Alberta fell 1.1% to 307 bcf.

Petrochemicals

Saudi Yanbu Petrochemical Corp., a joint venture of Saudi Basic Industries Corp. and Mobil Corp., let contract to Tokyo firms Mitsubishi Heavy Industries Ltd. and Toyo Engineering Corp. and ABB Lummus Global Inc., Bloomfield, N.J., for an integrated petrochemical plant to be built at Yanbu, Saudi Arabia (OGJ, Aug. 11, 1997, p. 34). The plant is scheduled for completion in 2000. Petrochemicals made from local naphtha feed will be exported to Asia and Europe. ABB Lummus will build the ethylene plant, Toyo the ethylene glycol and ethylene oxide units, and Mitsubishi the polyethylene and polypropylene facilities.

The Vietnamese government
approved a 30-year operating license for a planned $70-million, 110,000 metric ton/year polyvinyl chloride plant to be built near Ba Ria-Vung Tau port, southeast of Ho Chi Minh City. Petronas, Marubeni, Petrovietnam Gas Co., and Tramatsuco, Ba Ria-Vung Tau province, will own the company, called Phu My Plastics & Chemicals Co. Stakes are 40% for Petronas, 30% for Marubeni, and 15% for each of the Vietnamese firms. Construction will start next year, with commissioning planned for 1999.

Exploration

Shell Gabon discovered oil on the Kenguene Marin block off Gabon with Kenig-1, the third of three exploratory wells drilled in the permit area. The Glomar Adriatic V jack up drilled the wells in about 200 ft of water. Kenig-1 discovered oil in two layers of upper Cretaceous sandstone. Flow rates of more than 3,000 b/d of oil were recorded. Shell said an appraisal program will be required, with rapid development envisioned if proven commercial.

Talisman Energy Inc.,
Calgary, made two discoveries in western Canada. In the Edson, Alta., area, the Talisman Renata Apetowun 1-3-52-22W5M well, drilled to 14,635 ft TD, flowed 52.8 MMcfd of raw gas on initial test. The Talisman HZ Lovett River 13-10-47-19W5M well flowed 22.6 MMcfd after acidizing. TD was 15,092 ft, including a 3,280-ft horizontal section in the Turner Valley formation. The Apetowun well will supply 25-30 MMcfd of gas to Talisman's Edson gas plant beginning in mid-1998.

Gas processing

Koch Oil Co., Wichita, purchased ARCO Western Energy's North Coles Levee gas processing and NGL fractionation plant. Capacity of the plant, near Bakersfield, Calif., is 20 MMcfd of gas and 300,000 gpd of NGL. The purchase price was not disclosed.

Tankers

Chiyoda Corp., Yokohama, won an 8 billion yen contract to construct jointly with a local firm an oil tanker scrapping facility in Gujarat state. The complex, slated for mid-1999 completion, will include a dock capable of dismantling eight 120,000-dwt tankers/year, a disassembly yard, cranes, and equipment to prevent oil leakage. Ship-dismantling operations are expected to prosper in India due to rising demand for scrap steel. Scrapping demand is forecast to peak in 2000, as many single-hulled tankers built just after the oil crises of the 1970s come due for decommissioning.

Companies

Equitable Resources Energy Co. (EREC), Houston, is selling its oil and gas properties in the western U.S. and Canada. Big West Oil & Gas Inc., North Salt Lake, Utah, will purchase for $33 million EREC properties in Wyoming's Powder River basin and interests in about 540,000 acres of undeveloped oil and gas leases in the northern Rocky Mountains. Inland Resources Inc. will buy EREC's remaining Powder River properties for $55 million. Cabot Oil & Gas Corp., Houston, will acquire its Greater Green River basin properties in Wyoming for $44 million. Summit Resources Ltd., Calgary, will buy its Williston basin properties in Montana and North Dakota for $26 million. And EBOC Energy Ltd., Calgary, will buy its western Alberta properties for $17 million.

Shareholders of
Lateral Vector Resources Inc. (LVR), Regina, Sask., approved LVR's plan to sell its Canadian oil and gas assets and associated liabilities to NCE Energy Trust, Calgary. NCE will purchase all shares of a wholly owned LVR subsidiary, to which LVR will transfer its Canadian petroleum business. NCE will use cash and debt assumption to satisfy the $31.3 million purchase price. The properties are producing about 2,000 boed in Alberta, Saskatchewan, and British Columbia.

Power

Enron Corp. offered to buy 66.45 million shares (51%) of Kohinoor Energy Ltd.'s 120-MW heavy oil fuel oil-fired power project in Lahore, Pakistan. Enron reportedly offered 54¢/share. Pakistan's Saigol Group, a project owner, will manage the project; Enron will likely have majority representation on the board of directors. Construction has been completed at an estimated cost of $138.6 million. Japan's Tonen Corp. is a cosponsor of the project.

Gas marketing

A unit of TransCanada PipeLines Ltd., Calgary, has established a direct-purchase natural gas service aimed at the Ontario consumer market. TransCanada Energy Inc. will operate Energy Plus, which will offer customers price discounts at fixed rates in exchange for 3 or 5-year commitments for gas purchases. There are about 2 million residential gas consumers in Ontario.

Oilsands

Amber Energy Inc., Calgary, acquired 68 sections (53 net) of oilsands leases for $12 million in the Wabasca/Pelican Lake area of Alberta from an undisclosed party. The company now owns an average 93% working interest in 196.5 net sections in the Pelican Lake area, where it has reported significant discoveries. Amber plans to drill six stratigraphic tests on the new acreage in first quarter 1998 in preparation for a fourth quarter horizontal drilling program.