INDUSTRY BRIEFS

Corrections

In the Mar. 31, 1997, issue, p. 34, a typographical error incorrectly referred to Flores & Rucks Inc.'s interest in wells in Main Pass Block 66 field. It should have read Block 69.

In the Mar. 3, 1997, issue, p. 35, quotations on oil market flexibility were incorrectly attributed to Victor Burk, Arthur Andersen LLP's managing director of energy services, Houston. Joseph Stanislaw, managing director of Cambridge Energy Research Associates, made the statements.

Power

Apache Corp.,
Houston, and partners in the Harriet joint venture will supply about 7 bcf of natural gas to Wiluna Mines Ltd. for use at a gas-fired power plant being built at Wiluna Gold Mine in Western Australia. Operator Apache holds a 22.5% JV interest (OGJ, Jan. 27, 1997, p. 39). Partners are Ampolex Ltd. 25%; Kufpec Australia Pty. Ltd. 19.3%, Novus UK (Harriet) Pty. Ltd. 12.5%, TAP (Harriet) Pty. Ltd. 12.2%, and Hardy Petroleum Ltd. 8.4%. A private party owns the remaining interest. Gas will be produced from Harriet, Campbell, Sinbad, Rosette, Alkimos, Tanami, and Wonnich fields, processed at Varanus Island, and shipped via 5-mile pipeline from the plant to an onshore trunk line.

TermoEmca* S.C.A. E.S.P.,
Cali, completed debt financing for a $210 million, 234-MW, natural gas-fired, power-generating plant at Palmira, about 10 km from Cali. TermoEmca* is a partnership consisting of InterGen, Boston, a unit of Bechtel Enterprises, San Francisco, Empresas Municipales de Ca* EICE (Emcali), and Corporaci?n Financiera del Pacifico.

TransCanada PipeLines Ltd.,
Calgary, will transfer 100% of its Ontario-based power generation assets to a limited partnership, TransCanada Power LP, and hold a public offering. Assets include three enhanced, combined-cycle plants at Nipigon, Kapuskasing, and North Bay, Ont., with total generation capacity of 118 MW. Power is sold to Ontario Hydro under long-term contracts. TransCanada will retain a 50% interest in the partnership and use proceeds from the issue to fund a portion of its 1997 capital spending program.

Companies

MMS Petroleum plc,
London, acquired a 17.5% interest in Karakuduk oil field development project in Kazakhstan by purchasing from Chaparral Resources Inc., Houston, a 35% stake in its Central Asian Petroleum Guernsey Ltd. unit. Central Asian Petroleum has a 50% interest in the Karakuduk license; the Kazakh regional government holds the remainder. The field is slated to be on stream by yearend 1997.

Santos Ltd.,
Adelaide, exercised rights to preempt Novus Petroleum Ltd., Sydney, and acquire the East Spar gas project off northwest Australia from Western Mining Corp. (WMC), Melbourne. Santos paid $181 million (Australian) for the 30% WMC share of the development, now on stream, with a pipeline serving a processing plant on Varanus Island. The acquisition increased Santos' share to 45% from 15%. Novus did not get the share it sought in East Spar, but paid $6 million for WMC's interests in the surrounding Carnarvon basin region, including output from Airlie Island fields.

Vintage Petroleum Inc.,
Tulsa, completed a planned $101.4 million cash acquisition of Texas and Louisiana properties and facilities from Burlington Resources Inc., Houston (OGJ, Feb. 24, 1997, p. 44). Properties cover more than 74,000 net acres, about 46% offshore, which will give Vintage additional proved reserves of about 28.5 million bbl of oil equivalent (BOE). Vintage's reserve base at yearend 1996 was 242.1 million BOE. Vintage plans to spend about $11 million of its $124 million 1997 capital budget on the acquired properties.

Drilling-production

Phillips Petroleum
United Kingdom Ltd.
and partners in the Judy/Joanne (J-block) project in the U.K. North Sea on Apr. 16 began producing commercial quantities of liquids. Output, currently 25,000 b/d (gross), should average 35,000-40,000 b/d in 1997. Produced gas is reinjected into the formation for later production and delivery to purchaser Enron Europe Ltd. The $82 million reinjection project is expected to hike ultimate recovery 5%. Original J-block facilities were completed and ready for full production in February 1996, but Enron Europe did not want to begin taking gas until September 1999 (OGJ, July 8, 1996, p. 37).

France's
Total began first-phase work on Kharyaga field in Russia's Timan Pechora basin, 60 km north of the Arctic Circle, after receiving one of several needed government approvals (OGJ, July 27, 1992, p. 101). Total plans to produce about 10,000 b/d by the end of first half 1998. The program includes drilling two deviated wells and building related installations. Total plans to raise output to 30,000 b/d in the second phase, with output eventually reaching 70,000 b/d once transportation capacity is added between Kharyaga and Ussinsk. Development is covered by a 33-year production-sharing contract signed in 1995.

Petro-Canada,
Calgary, and partners plan to drill a delineation well in September in the Hebron area of the Grand Banks off Newfoundland, about 37 km southeast of Hibernia field. The well, 3 miles northeast of 1 Hebron-13, a 1981 discovery, will determine if hydrocarbons are trapped in the undrilled Ben Nevis zone. A 3D seismic survey is slated in July over the area and other blocks. Operator Petro-Canada holds about a 21.9% interest. Partners are Mobil Oil Canada Ltd., about 36.4%; Chevron Canada Resources, about 31.9%; and Norsk Hydro Canada Oil & Gas, about 9.4%.

Stone Energy Corp.,
Lafayette, La., brought under control a blowout that occurred Apr. 15 in the Gulf of Mexico in its No. 3 well on South Timbalier Block 8 field in state waters off Terrebonne Parish, La. The blowout, which caused no injuries, occurred during a workover. Initially, only dry gas flowed from the wellhead, followed by a small amount of condensate. Stone said no environmental damage occurred to the Isle Dernieres barrier island bird habitat.

Diamond Offshore Drilling Inc.,
Houston, will acquire the semisubmersible accommodation vessel Polyconfidence, currently working in the U.K. North Sea, from Norway's Rasmussen Offshore AS for about $81 million cash. Diamond Offshore, in discussions with several oil companies, may convert the vessel to a semisubmersible drilling unit with fourth- or fifth-generation capabilities; it now has Class III dynamic-positioning capabilities. Conversion, estimated at $165-175 million, depends on negotiating a term contract with favorable day rates. Conversion would begin when the current contract expires, or no later than March 1998.

Hardy Oil & Gas plc,
London, tested its second well in PY-3 field on Block CY-OS-90/1 in the Cauvery basin off southeastern India. The well flowed 5,300 b/d of 49° gravity oil and will be completed as a producer, following a similar announcement in March. PY-3 is expected to be on stream in the second half 1997 after two additional development wells are drilled.

Gas processing

Delhi Gas Pipeline Corp.,
Dallas, a unit of USX-Delhi Group, completed expansion of the Tippett gas processing plant in Crockett County, Tex. (OGJ, Dec. 2, 1996, p. 36). The expansion increases the plant's processing capacity by 40% to 55 MMcfd, more than doubling natural gas liquids output to more than 200,000 gpd. The project included converting the cryogenic plant to an Ortloff gas sub-cooled process design, which substantially boosts gas stream liquid recoveries. The plant serves producers developing gas supplies in the Terrell and southern Pecos counties areas of West Texas.

Williams Energy Group,
Tulsa, acquired the remaining 50% interest in the Cameron Meadows natural gas processing plant in southwestern Louisiana from Warren Petroleum Co., a unit of NGC Corp., Houston. The 500 MMcfd peak capacity plant is adjacent to the Johnson Bayou liquids separation and dehydration plant, 70 miles south of Lake Charles, in Cameron Parish, La.

Pipelines

Delhi
is laying a 15-mile, 12-in. pipeline from its newly expanded Tippett gas processing plant to the Oasis Pipe Line. The new line will provide shippers ability to access intrastate market outlets via Oasis or an existing interstate residue connection. Construction is slated for completion by June 1, 1997.

Canada's
National Energy Board seeks written comments by May 16 on a draft scope for the environmental assessment of the Alliance pipeline project. Alliance Pipeline Ltd., Calgary, plans to file with NEB in mid-1997 for a certificate to build the 37.3 MMcfd capacity, $3.6 (Canadian) billion, 1,600-km system from northwestern Alberta to the Chicago area (OGJ, Feb. 10, 1997, p. 34).

Shell Deepwater Development Inc.
let contract to Global Industries Ltd., Houston, to lay more than 100 miles of pipeline in the Gulf of Mexico to connect Shell's 2 Tahoe subsea production system in Viosca Knoll Area Block 783 with its Bud Light platform on Main Pass Block 252 (see related story, p. 26). Work involves installing dual 6-in. and dual 4-in. lines inside 8-in. insulated pipelines laid in up to 1,500 ft of water. The pipelines will be welded and spooled onshore and laid by Global's Chickasaw pipelay barge. Global will mobilize Pioneer, its small water plane area, twin-hull vessel, to complete jumper installations.

Great Lakes Gas Transmission Inc.,
Detroit, let contract to Willbros Group Inc., Tulsa, for project management, engineering, and related work for a planned $2.5 billion expansion involving 1,000 miles of new pipeline and an interconnection with the TransCanada PipeLines Ltd. system at the Minnesota-Manitoba border. Contract value is expected to be more than $15 million. Great Lakes plans to file a Federal Energy Regulatory Commission application in September 1997.

IPL Energy Inc.,
Calgary, last week was repairing several sections of crude oil pipeline extending from western Canada to the U.S. Midwest and eastern Canada, which were removed from service Apr. 18 after a small spill. IPL crude lines 2b, 3, and 13 were initially shut down; lines 2b and 13 were reopened in 5 hr while Line 1, which carries natural gas liquids and refined products, was put back in service after a brief shutdown. Before OGJ presstime, work was under way to reopen Line 3, location of the leak. The company said less than 10 bbl of crude were spilled. A previous IPL disruption in April due to a winter storm and power failures cut deliveries by about 800,000 b/d for 3 days.

Spills

An Apr. 10 oil spill
by Taiwan's Chinese Petroleum Corp. (CPC), caused by a pipeline rupture in Taoyuan County, resulted in about 500 bbl of oil being spilled. Oil destroyed crop land, entered an area stream, and caused serious damage at a nearby fishing port. CPC was forced to shut down operations for 4 days. CPC promised to compensate farmers and fishermen living in the area for any losses and to restore all affected land within 1 year. Landowners, however, believe it could take as long as 5 years before the land is again suitable for growing crops.

Courts

Ethyl Corp., Richmond, Va., filed a claim of at least $350 million (Canadian) with the U.S. Justice Department against the Canadian government over legislation to prohibit the importation or interprovincial trade of MMT, a gasoline additive (OGJ, Apr. 21, 1997, Newsletter). Ethyl is seeking compensation under the North American Free Trade Agreement. The case is being closely watched as a precedent in international trade. Ethyl says the Canadian legislation bars only the importation of MMT, not its use. The legislation has been approved by both houses of Canada's parliament and is expected to receive royal assent, the final step in making it law.

Exploration

Total Oil Marine plc
will spud a wildcat well in June in the Porcupine basin off western Ireland. The Block 35/17 well will be drilled by the Sovereign Explorer semisubmersible rig operating in 620 m of water. Total measured depth of the well is expected to be 5,000 m. The well will mark a return to the region for Total, which last explored off Ireland in 1983-90.

Amoco Corp.
disclosed two further drilling successes on the North Sinai concession in the Nile Delta off Egypt. The 1 Kamose well was drilled in 98 ft of water and cut 269 ft of gas pay; its similarity to the nearby 1 Tao discovery well enabled Amoco to declare the find commercial without flow testing. The 1 Seti Plio well was drilled in 280 ft of water, and was also declared commercial without testing. Amoco plans to build a liquefied natural gas export plant on Egypt's Mediterranean coast to exploit its gas finds in the region, but has not declared reserves for its discoveries there.

Apache Corp.,
Houston, signed a letter of intent with FX Energy Inc., Salt Lake City, which would give Apache operatorship of and a 50% interest in nearly 2 million acres in Poland, about 100 miles southeast of Warsaw, near Lublin. Apache and FX Energy designated an area of mutual interest covering 4 million additional acres on adjacent blocks. The project marks Apache's first venture into eastern Europe. Under the agreement, Apache will drill at least one well and conduct about 300 miles of 2D seismic surveys over the next year at a cost of about $5 million. Additional wells are permitted if conditions warrant.

LPG

Total
formed a joint venture with Viet Nam's Trade Import & Export Co. to import, store, and market LPG. Total will own 70% of the new company to be formed, Total Gas Haiphong, to be based in Haiphong, Viet Nam. The venture involves building a receiving terminal, a storage depot with initial capacity of about 1,000 metric tons, and a bottle-filling unit. The $10.35 million investment marks Total's second project in Viet Nam, following a JV last November with PetroVietnam and Thailand's Petroleum Authority of Thailand to build a storage center at Ho Chi Minh City.