INDUSTRY BRIEFS

Power

El Paso Energy International Co., Houston, acquired a 31.15% interest in the Czech Republic's $401 million ECKG power project at Kladno, west of Prague. The project involves expanding an existing 27-MW power plant by 316 MW, 66 MW of which will be gas-fired and 250 MW fired by coal. Partners include Northern States Power Co. unit NRG Energy 57.85% and Czech distributor Stredoceska Energeticka 11%.

LPG

Algeriainaugurated a new LPG plant at Hassi Messaoud, 800 km south of Algiers. The 40 million cu m/day capacity unit is part of a network being developed to double Algeria's LPG exports by 2000.

Gas storage

U.S. Federal Energy Regulatory Commission approved a $275 million expansion of Columbia Gas Transmission Corp.'s storage facilities. The 3-year project will provide another 500 MMcfd of storage and transportation services to local gas distribution and power generation firms. It includes 50 miles of new pipeline, 46,000 hp of additional compression, and 36 new storage wells.

Drilling-production

Petro-Canada, Calgary, and partners in Terra Nova oil field off Newfoundland let contract to Transocean Offshore Inc., Houston, to charter the semisubmersible Transocean Explorer for 2 years, with three 1-year extension options. Upgrading the rig for Grand Banks operation will cost about $58-74 million (Canadian). The unit will drill and complete some wells in spring 1998 before arrival of a floating production platform; as many as 44 wells may be required. Regulatory approvals and a final go-ahead by partners are still needed, but operator Petro-Canada wanted to secure the rig now.

Apache Corp., Houston, plans to recomplete the Harmattan 6-16 well in Alberta, following completion of its nearby Harmattan 12-16-33-3 horizontal well, which flowed 22 MMcfd of gas and 150 b/d of condensate with 500 psi flowing tubing pressure during an open-hole test. The well reached a measured depth of 9,416 ft and tapped a combined 1,200 ft of horizontal pay in the Mississippian Elkton formation at a true vertical depth of about 8,020 ft. Using steel coiled tubing in the well's horizontal section allowed underbalanced drilling, reducing reservoir damage and improving output rates. Apache, which holds 100% working interest in both wells, also plans to participate in three additional Elkton wells in the unitized portion of the Harmattan field this year.

Sasol Petroleum International (Pty.) Ltd.,
Johannesburg, reports plans to develop its first oil discovery, Djambala field, about 55 km off the Congo. The field is expected to go on stream less than 2 years after discovery, with initial output of 4,000 b/d in August 1998. Plans call for two subsea wells tied back to a platform to be installed in Kitina field about 11 km south of Djambala. Oil will be partially treated on the platform before shipment via the main oil pipeline to the Djeno terminal for stabilization and storage prior to export. Interests are operator Agip Recherches Congo SA 52%, state oil company Hydrocongo 35%, and Sasol 13%.

Qatar General Petroleum Corp.
plans to sign a production-sharing agreement with one or more foreign companies for the Idd Al Shargi South Dome offshore concession, about 150 km northeast of Doha. Qatar's Idd Al Shargi North Dome field, operated by Occidental Petroleum Corp., produces 80,000 b/d of oil. Qatar also is evaluating the possibility of signing exploration and production-sharing agreements for onshore Block 2 South and Block 2 North and offshore Block 7, all east of Doha. Amoco Corp. previously relinquished Block 2 areas.

Conoco (U.K.) Ltd.
let contract to Brown & Root Energy Services Ltd., Leatherhead, U.K., for two new unmanned wellhead platforms and a reception module in Viking field. Conoco is developing four accumulations in Viking with estimated gas reserves of 500 bcf (OGJ, Apr. 7, 1997, p. 37). Brown & Root's contract is for engineering, procurement, fabrication, installation, and commissioning of the tripod design platforms and an 800 metric ton module. Fabrication is slated for completion in April 1998, with installation due in May and first gas in the fourth quarter.

Companies

Columbia Gas System Inc., Charleston, W. Va., will acquire independent producer Alamco Inc., Clarksburg. W.Va., for about $101 million, including the assumption of about $18 million debt. The merger plans hinge on approval by Alamco's stockholders at a meeting Aug. 7.

Italy's ENI
will hold a third public share offering June 23-27 towards its goal of privatizing as much as 49% of the national oil company. The procedures and goals will be the same as previous offers (OGJ, Oct. 7, 1996, Newsletter); however, this time a bonus share for every 10 will be granted to investors who don't sell for a year. The size of the offer will be disclosed June 7, maximum price per share on June 21, and the final price on June 28.

Oilsands

Birch Mountain Resources Ltd., Calgary, signed an agreement with Syncrude Canada Ltd. for exploration, development, extraction, and production at a new oilsands site. Syncrude holds oilsands rights for the proposed Aurora mine in the Fort McMurray, Alta., region. Birch Mountain has rights to metallic and industrial minerals. The companies will collaborate on development of the new Aurora mine, which is slated for production start-up by 2001.

Solv-Ex Corp.,
Albuquerque, plans to spend more than $1 billion for commercial-scale development of its oilsands mine and extraction complex on Leases 5 and 52 near Fort McMurray. Plans include increasing synthetic crude output to 80,000 b/d from 15,000 b/d and building a bitumen production module. The leases are on the east bank of the Athabasca oilsands area, where pipelines have been proposed to ship oil to Edmonton and Hardisty, Alta., by 1999. Solv-Ex estimates more than 4 billion bbl of oil is recoverable from the leases. It hopes to receive needed approvals by 1998 and begin oil production 18-24 months later.

Pipelines

State Petroleum Corp., a unit of Calgary-based Arakis Energy Corp., and partners plan to construct a 28-in., 1,540-km export pipeline and marine terminal in Sudan. The pipeline will have 250,000 b/d initial capacity, with start-up volumes of 150,000 b/d from the Arakis-operated concession in southern Sudan and excess capacity to meet postulated supplies from other exploration blocks in the Sudan. Partners are considering about 25 bids from international contractors and will send requirement packages to selected bidders in June. Interests are State Petroleum 25%, China National Petroleum Corp. 40%, Petronas Cariga* Overseas Sdn. Bhd. 30%, and Sudapet Ltd. 5%.

Shell Canada Ltd.
and ATCO Corp., both of Calgary, are holding a 1-month open season for their proposed Alberta Pipeline Project. The companies seek agreements from shippers to support a $550 million (Canadian), 1.2 bcfd export pipeline from Alberta to the Saskatchewan border. They plan to file an application with Canada's National Energy Board (NEB) in July.

TransCanada PipeLines Ltd.,
Calgary, will spend as much as $2.6 billion (Canadian) in 3 years on its Nexus project to move gas from Alberta to the U.S. Midwest and Northeast, adding as much as 3 bcfd to its current 7 bcfd system capacity. The $1.1 billion first phase, which TransCanada recently filed with NEB, would add 456 MMcfd by November 1998; another expansion, for 300 MMcfd, is under way for November 1997 (OGJ, May 19, 1997, p. 39).

Exploration

Explogas Ltd., Montreal, and Genoil Inc., Calgary, spudded 1 Ana Maria on Block Vll off Cuba's southwestern coast near the covergence of the Ana Maria and Guacanayabo gulfs. The well is the first prospect to be tested on the property by the combine after signing a joint operating agreement with Sweden's Taurus Petroleum AB.

Triton Energy Ltd.,
Dallas, and Parker & Parsley Petroleum Co., Midland, Tex., will explore adjacent Blocks A-4-91 and A-1-93 in the South Peten basin of Guatemala. The companies plan to drill 1 Piedras Blancas on Block A-1-93 to about 11,000 ft, targeting Cretaceous Coban. The blocks cover a total of 607,673 acres about 94 miles northwest of Guatemala City near the Mexican border. Operator Triton holds a 60% interest, Parker and Parsley 40%.

Alternate fuels

State-owned China Oil, Beijing, let contract to Petroleos de Venezuela SA (Pdvsa) unit Bitumenes Orinoco SA to supply 1 million metric tons/year of Orimulsion, the company's trademark boiler fuel that is an emulsion of extra-heavy crude, water, and a surfactant. Deliveries will begin this year. A separate contract also gives China Oil technical and marketing support for the product. The contracts stem from agreements signed in 1996 between the two companies to evaluate and test the feasibility of Orimulsion use in China.

Petrochemicals

BP Chemicals Ltd. began a $56 million expansion of an ethylene cracker at its Grangemouth, Scotland, plant. BP will install two new furnaces and a C3 hydrogenation unit to increase ethylene capacity by 50,000 metric tons/year from the current 700,000 tons/year; BP intends to expand this to more than 1 million tons/year. In a total $800 million expansion, BP also plan to add a polyethylene plant and a world-scale polypropylene unit at Grangemouth.

Chevron Chemical Co.
signed a memorandum of understanding with Pdvsa unit Maraven SA to conduct a joint feasibility study of an integrated aromatics project at the Cardon industrial park on Paraguana Peninsula in the state of Falcon, Venezuela. The study, slated for completion in March 1998, will look into building a world-class petrochemical complex.

Petrochemical Co. Ltd.,
Eleme, Nigeria, cannot commission its $1.8 billion petrochemical plant near Port Harcourt, Nigeria, because it is unable to cover overhead and meet debt obligations. The plant was designed to produce 330,000 metric tons/year of resins, 150,000 tons/ year more than required domestically, as part of a government plan to boost industrial growth through exports and utilize natural gas now being flared. Debts are about $4.5 million in arrears, not counting $182 million owed to Nigerian Agip Oil Co.

Gas distribution

Pacific Enterprises, Los Angeles, and Enova Corp., San Diego, and Mexican partners Proxima Gas and Corp. San Angel tendered a bid to Mexico's Energy Regulatory Commission for privatization and expansion of a natural gas distribution system in the Toluca area, an industrial center about 40 miles west of Mexico City with about 1.1 million people. Plans include a 78-mile pipeline to bring gas from Palmillas into Toluca's distribution grid. The winning bid will be announced July 9.

Gaz de France
(GdF) and partners will spend about $150 million to develop a gas distribution network for the northeastern Argentina provinces of Entre Rios, Misiones, Corrientes, Chaco, and Formosa. The project involves laying 3,000 km of distribution lines in 36 towns, which offer a potential customer base of 150,000-200,000, by 2010. Initially, all but Entre Rios will be served by an LPG distribution system to be converted to natural gas later; Entre Rios will be served by a pipeline now being laid by the provincial government. Distribution project partners are GdF units Gasebe SA 15% and Gas del Sur 55% and Argentina's Bridas Sapic and Emprigas, 15% each.

Gas processing

Mobile Bay Processing Partners (MBPP), Houston, signed a letter of intent with Mobil Exploration & Producing U.S. Inc. to process as much as 300 MMcfd of Mobile Bay, Ala., area gas sweetened at Mobil's plant near Coden, Ala. MBPP's planned cryogenic plant would recover more than 90% of ethane and virtually all heavier liquids from the gas stream. Construction is to begin this summer for an in-service date of June 1998. The design calls for as many as three trains with total capacity of 900 MMcfd, including a 300 MMcfd train also slated to start up in summer 1998 for producers in the Gulf of Mexico's East Main Pass and lower Viosca Knoll areas (OGJ, Feb. 10, 1997, p. 34). MBPP partners are PanEnergy Corp., Houston, and MCN Energy Group Inc., Detroit, 49.5% each, and Offshore Energy Development Corp. 1%.

Refining

Esso Singapore Pte. Ltd. is considering a $765 million, 35,000-40,000 b/d hydrocracker at its 200,000 b/d Palau Ayer Chawan refinery in Singapore. An estimated 60-70% of the hydrocracker's output would be lubricant base stocks; the rest kerosine and diesel. The cracker would be able to utilize excess hydrogen streams from an upstream cracking unit. The plans are linked to Exxon Chemical Co.'s decision to build a $2 billion petrochemical complex, Singapore's third, at the same refinery site, slated to come on stream in 2000 (OGJ, Mar. 17, 1997, p. 44).

Spills

Texaco Pipeline Inc. reopened its Eugene Island pipeline May 22, following a rupture 2 days earlier that spilled about 5,000 bbl of crude oil into Louisiana's Lake Barre (OGJ, May 26, 1997, p. 31). About 2,500 bbl were mopped up with absorbents at presstime; officials were not sure how much more could be cleaned as progress slowed in the marshy area. As a safeguard, the state closed many oyster operations. Initial inspections revealed a 34-in. gash in the damaged segment of pipe. Testing under way will help pinpoint what might have gouged the pipeline, which was buried under 5 in. of mud, officials said.