INDUSTRY BRIEFS

Refining

China Petrochemical International Co. (Sinopec) let a $23.7 million contract to Foster Wheeler Pyropower Inc., a Foster Wheeler Corp. unit, to supply two circulating fluidized-bed boilers as part of a $1.25 billion refinery expansion in China. The 220-metric ton/hr boilers will be first in China designed to burn 100% high-sulfur petroleum coke. Foster Wheeler will supply equipment, engineering, and design. Commercial operation is scheduled for mid-1999. The boilers will power two 25-MW steam turbine generators and produce process steam for the plant, to be built at Zhenhai Refining & Chemical Co. Ltd.'s complex near Ningbo.

Tankers

Mobil Corp. will purchase the first newbuild double-hulled tanker to be built in a U.S. shipyard that meets U.S. Oil Pollution Act of 1990 (OPA 90) requirements. OPA 90 requires all ships carrying petroleum products in U.S. waters to have double hulls by 2015. The 45,000-dwt petroleum products tanker was the first of a four-ship order received by Newport News Shipbuilding from another shipping company. Through an agreement among the three companies, Mobil will buy the ship to meet its near-term transportation needs. Tanker will transport gasoline and distillates to Florida markets.

Drilling-production

Statoil Exploration (US) Inc. will become a 35% working interest partner in Texaco Exploration & Production Inc.'s Fuji project in the Gulf of Mexico (OGJ, Mar. 18, 1996, p. 34). Two delineation wells are planned in 1997. Statoil will participate in an initial delineation well on Green Canyon Block 505 to earn a 35% working interest in the Green Canyon Block 506 discovery. Delineation, 1 Green Canyon Block 505 in 4,280 ft of water, will spud this month. Second delineation is planned in second half 1997.

Marathon Oil Co. bought Chevron U.S.A. Inc.'s Steamboat Butte and Pilot Butte fields in Fremont County, Wyo. Properties produce 940 b/d of oil and 700 Mcfd of gas from 34 wells and complement Marathon's properties in Wyoming, which include Circle Ridge field on the Wind River Indian Reservation.

Chevron Corp., Elf Aquitaine SA, and Mobil Corp. units expect to start production in about eight Nigerian oil fields this year, including Amenam, Andobite/Ogon, Ewan, Gbokoda, Dibi, and Opola. Companies all exceeded projections last year despite financial problems triggered by a midyear cut in joint venture partner Nigerian National Petroleum Corp.'s operating budget. Mobil surpassed its target of 518,000 b/d, while output by Chevron and Elf rose to an average of 401,000 b/d and 124,000 b/d, respectively. Chevron concluded the first phase of a development program on six leases in Benue area, northern Nigeria.

Canadian Occidental Ltd., Calgary, drilled three high-productivity delineation wells on Yemen's Masila block. Wells, in the southeast corner of the block, were tied into production facilities and have combined output of 24,000 b/d.

Elf Exploration U.K. plc started oil production from Iona field on U.K. North Sea Block 15/17. First oil flowed on Jan. 30 at a rate of 4,400 b/d. Iona, formerly known as South Piper, was developed with extended-reach wells drilled from Elf's nearby Saltire A platform. License partner Lasmo plc, London, said well productivity was higher than anticipated. Reservoir tests the next few months are expected to lead to further drilling from Saltire to raise total production.

Elf Petroleum Norge AS let a $24 million contract to AMEC Process & Energy AS, Stavanger, for technical support in Frigg, Heimdal, and Froey fields in the Norwegian North Sea. The 3-year contract, with potential for two 2-year extensions, requires AMEC to conduct engineering, modifications, maintenance, and technical assistance in the fields. The new contract covers work previously carried out under 19 contracts.

Gas processing

Enron Corp. signed a letter of intent to sell its Bushton natural gas processing plant and Hugoton basin gathering assets in Kansas to KN Energy Inc. Both are Houston companies. The Bushton plant processes about 825 MMcfd and produces about 1.2 million gpd of liquids, plus about 1.7 MMcfd of helium. Hugoton basin assets gather about 475 MMcfd of gas through about 2,200 miles of pipeline extending through several Kansas counties and one Oklahoma county. Divestiture, subject to antitrust review, is part of Enron's plan to reduce non-strategic financial obligations and focus on its core business.

Companies

M.W. Kellogg Co., Houston, acquired a 40% interest in Paragon Engineering Services Inc., Houston. Purchase enables Dresser to expand an alliance with Paragon, as well as continue its diversification into upstream oil and gas markets. Dresser-Rand Co., a venture of Dresser and Ingersoll-Rand, will retain a 40% interest, and Kenneth E. Arnold, Paragon president and CEO, will own the remainder.

Exploration

Total SA and Unocal Corp. signed a production-sharing contract for a large area where Total found gas in the Andaman Sea off Myanmar. Deal covers Block M8, which is close to M5 and M6 blocks, where Yadana gas field is being developed. Interests are operator Total 52.5% and Unocal 47.5%. State-owned Myanmar Oil & Gas Enterprise has an option to take a 15% share in the project. Total plans to lay a pipeline to Thailand. Output is slated to begin in mid-1998 and peak at 650 MMcfd. Of that total, 525 MMcfd will supply Ratchaburi power station in Thailand, with the rest destined for Myanmar (OGJ, May 13, 1996, p. 46).

Phillips Petroleum Peru Ltd. signed a 7-year exploration contract with state-owned Perupetro SA to explore the 3.1-million acre Block 82 near the Ucayali basin along Peru's border with Brazil (see map, OGJ, Nov. 18, 1996, p. 18). Operator Phillips plans to assign a 50% interest in the contract to Agip Exploration BV. Venture will reprocess existing seismic data, perform anthropological and environmental studies, and conduct remote sensing during contract's first phase. Venture will have various drilling options.

Elf Aquitaine secured a new exploration and production-sharing agreement with Syria and state firm Syrian Petroleum Co. Interests are operator Elf Hydrocarbures Syria 40% and Sumitomo Petroleum Development Ltd. of Japan and Malaysia's Petronas Carigali Overseas Sdn. Bhd. 30% each (OGJ, Dec. 4, 1995, p. 44). The tract covers 4,200 sq km in northern Syria. License obligations include acquisition of 1,100 sq km of 3D seismic data and drilling of three exploration wells in 3 years.

U.S. Minerals Management Service requested public comment on four western Gulf of Mexico lease sales planned during 1998-2002. Agency is preparing a multisale environmental impact statement, rather than a separate document for each of the proposed sales, 171, 174, 177, and 180.

Power

Bahrain's Ministry of Water & Electricity let a $458 million turnkey contract to a group led by ABB Power Generation Ltd., Baden, Switzerland, to build a gas-fired power station and desalination plant at Hidd on Muharraq Island in the Persian Gulf. The complex will have capacity to produce 280 MW of power and 30 million gpd of salt-free water. Construction is to begin immediately with a view to full commercial operation by late 1999.

Pipelines

NOVA Gas Transmission Ltd., Calgary, delivered record natural gas volumes for the eighth consecutive year. Company shipped about 4.4 tcf of gas in 1996, up 4% from 1995. NOVA also broke daily delivery volume records on Dec. 28, 1996, shipping 13.73 bcfd through its system vs. an average 12.1 bcfd for the full year and an average 11.65 bcfd in 1995. Export deliveries for the year rose to 3.735 tcf, up 3.8% from 1995.

Canada's Northern Pipeline Agency approved a design by Foothills Pipe Lines Ltd., Calgary, for its planned $167 million eastern leg pipeline expansion project, involving 70.5 miles of 42-in. pipeline. Gas delivered through Foothills' eastern leg is shipped to U.S. Midwest markets on Northern Border pipeline. The National Energy Board recently approved an application by Foothills to build an $18 million (Canadian) decompression/ recompression station at Empress, Alta. Project will provide about 690 MMcfd of incremental natural gas export capacity, a 45% increase, for the eastern leg of the expansion starting Nov. 1, 1998 (OGJ, Jan. 27, 1997, p. 38).

Peace Pipe Line Ltd., Calgary, plans to begin construction of a 149-km, 323-mm pipeline between LaGlace and Valleyview, Alta. Pipeline, slated for completion by mid-February, was approved last month by Alberta's Energy and Utilities Board. Expansion will increase Peace's capacity by about 350 MMcfd and alleviate a bottleneck in its system.

Williams Cos.' Williams Field Services unit became majority owner and operator of the Webb-Duval Gatherers 275 MMcfd gathering system in South Texas by acquiring the 51% share formerly held by KN Energy Inc., Houston. System comprises 108 miles of 8-16-in. pipelines in Webb and Duval counties. Separately, Williams also acquired assets of American Gathering LP, another KN Energy unit, which includes 16 miles of 12-in. pipeline next to the Webb-Duval system and a 50% interest in the Bee County gas plant, near Beeville, Tex., from Liquid Energy Corp., a division of Mitchell Gas Services Inc.

Alyeska Pipeline Service Co. installed temporary back pressure control equipment on the Trans-Alaska Pipeline System at Thompson Pass to eliminate slackline pressure pulses and associated pipeline vibrations. The temporary measure was required when throughput dropped below 1.41 million b/d at pump station 12. Permanent equipment will be installed in the summer.

LPG

Noble Affiliates Inc., Ardmore, Okla., started up an LPG plant in Equatorial Guinea. Feed for the complex is from Alba field, in which Noble has a 35% working interest. Initial production is 1,700 b/d of LPG and 400 b/d of condensate. Plant capacity is about 2,400 b/d of LPG. Noble has a 33.25% revenue interest until payout, at which time its plant interest falls to 28%.

Petrochemicals

Marathon Oil Co. and Epsilon Oil Products, Garyville, La., plan to build, subject to definitive agreements, grassroots polymer-grade propylene and polypropylene plants at Marathon's Garyville refinery. Project involves construction of purification facilities that would produce 800 million lb/year of polymer-grade propylene from an existing feedstock unit. Project also includes an 800 million lb/year polypropylene plant similar to one operated by Epsilon in Marcus Hook, Pa.

Qatar Fuels Additives Co. (Qafac), Qatar's downstream oil company, let a $425 million contract to Japan's Chiyoda Corp. to build a petrochemical plant at the Mesaieed industrial area, about 50 km south of Doha. Project will produce 825,000 metric tons/year of methanol and 610,000 tons/year of methyl tertiary butyl ether. Qafac is owned by Qatar General Petroleum Corp. 50%, Taiwan's Chinese Petroleum Corp. 20%, and Canada's International Octane Ltd. and Taiwan's Lycic 15% each. Start-up is planned for mid-1999. Total project cost is estimated at $650 million.

Nissho Iwai Corp., Japan, in partnership with Indonesia's P.T. Tirtamas Majutama and Thailand's Siam Cement Co., will build a joint-venture olefins-including ethylene and propylene-plant at Tuban on Java. The JV, Trans-Pacific Petrochemical Indotama, will be capitalized at $600 million. Tirtamas will own 70%, Siam Cement 20%, and a Japanese trading house the remainder. Construction is to begin in July, with production start-up slated for 1999. Construction of a second plant, to produce polyethylene and polypropylene, is to begin in June at the site. Combined capacity will total more than 3 million metric tons/year. Total project cost is $3.1 billion.

Shell International Chemicals Ltd. sold Imperial Chemical Industries plc (ICI) its process for producing methyl methacrylate and other methacrylate monomers from cracker feedstocks. This process was developed under a program in which Shell commercialized its Shell Middle Distillate Synthesis and Carilon polyketone engineering thermoplastic polymer processes. Shell said outright sale of a process it has not commercialized is a new approach and represents its drive to focus only on business areas where it can achieve world leadership.

Shell Chemicals Europe Ltd. will spend $16 million upgrading solvent facilities at its Stanlow, U.K., refinery, where Shell produces isopropanol and acetone for customers in U.K. and continental Europe. Work will include reduction of emissions, improvements to the control room, and repair of ancillaries.

Environment

U.S. Supreme Court declined to review a lower court ruling allowing California conservation groups to sue an oil company for violating discharge permits, although the company had paid $780,000 to resolve a state enforcement action. The case, Union Oil Co. of California vs. Citizens for a Better Environment, involved selenium discharges into San Francisco Bay.

Catalysts

ICI is to buy the Syngas catalyst business of BASF AG. This includes technologies for production of ammonia, methanol, and hydrogen and is intended to strengthen ICI's global catalyst position. ICI claims to have more than 400 chemical plants worldwide using its catalysts, and its low pressure methanol process is used in more than 70% of methanol plants worldwide.