INDUSTRY BRIEFS

LNG

Tennessee Gas Pipeline Co., a unit of El Paso Energy Corp., Houston, and Detroit-based MCN Investment Corp. formed a 50-50 joint venture, Continental States Peaking Services LLC, which will build a $40-50 million LNG complex on the Delmarva peninsula near the Maryland-Delaware border. The project will provide liquefaction, storage, and vaporization starting in 2000. The complex will connect to the Eastern Shore Natural Gas Pipeline system. The exact capacity of the complex will be determined by a June 18-July 25 open season; preliminary plans call for 1-2 bcfd storage and 100-200 MMcfd capacity for peak-day withdrawal of revaporized natural gas.

India's government plans to build four more LNG terminals, at Paradip and Visakhapatnam on the east coast and at Kandla and New Mumbai on the west coast. Slated for completion in 2005, the terminals will be built by groups of Indian and multinational companies. Each 40,000 b/d capacity terminal will require an investment of about $1.1 billion. India's Oil and Natural Gas Commission, India Oil Corp., and Gas Authority of India Ltd. are among the domestic players; Total and Shell also are expected to participate.

Pipelines

ATCO Gas Services Ltd. and Shell Canada Ltd., both of Calgary, filed with Canada's National Energy Board for a new $35 million (Canadian), 252 MMcfd capacity natural gas pipeline. Crowsnest pipeline would run about 50 miles from Shell's Waterton Gas plant in southern Alberta to an Alberta Natural Gas Ltd.'s compressor station about 2 miles west of the British Columbia boundary. The pipeline is slated for completion in October 1998. The partners last month sought shippers for the proposed $550 million Alberta Pipeline project, which would move gas to the Alberta-Saskatchewan border for export. Both lines would compete with existing NOVA Gas Transmission Ltd. pipelines.

BC Gas Utility Ltd., Vancouver, B.C., filed an application with the British Columbia Utilities Commission to build and operate a $300 million (Canadian), 312-km, 24-in. pipeline from Yahk, in the southeastern corner of the province, to Oliver in the Okanagan Valley. The pipeline, called Southern Crossing, is slated to be in service by yearend 1999. BC Gas is seeking to complete regulatory review and approvals this year.

Gas processing

NOVA Gas Transmission Ltd., Calgary, will complete a 65 MMcfd gas processing plant this fall at Zama Lake in northwest Alberta and take over gas gathering and processing in the area for Gulf Canada Resources Ltd. and Pennzoil Canada Inc. The company will assume management and operation of a 30 MMcfd Gulf plant and 60 miles of gathering lines.

Exploration

Oryx Energy Co., Dallas, and partners made a subsalt discovery with about 300 ft of net pay above and below salt in 4 Garden Banks on Garden Banks Block 215 in the Gulf of Mexico. The well, in 1,500 ft of water, reached 21,692 ft TD. It was not flow-tested. A confirmation will spud in the third quarter to validate the areal extent of the reservoir and determine the most economic means of development. Oryx owns a 25% interest in block 215; units of operator Amerada Hess Corp. and Shell Oil Co. each hold 37.5%.

Coastal Corp., Houston, won a bid to explore in the Timor Sea off Australia's northern coast on permit areas AC96-3 and AC96-4, about 450 miles west of Darwin. The areas cover 355,000 and 375,000 acres, respectively, in 300-1,000 ft of water. Operator Coastal holds a 50% interest in permit AC96-3. Partners on AC96-3 are Asamera Australia Ltd. 40%, a unit of Gulf Canada Resources Ltd., and New Zealand's Todd Petroleum Mining Co. Ltd. 10%. In permit area AC96-4, Coastal owns 40%; Asamera and Hardy Petroleum Ltd. each hold 30%.

France's Total SA and partners completed a $218 million, 26,180-km seismic survey in the Caspian Sea off Kazakhstan, the largest Caspian marine survey ever conducted, officials said. After results are evaluated, the partners will be able to choose from 12 blocks and begin drilling, pending production-sharing contract awards by Kazakh- stan's government.

Energy Africa Gabon Ltd., a unit of Energy Africa Ltd., Johannesburg, secured a production-sharing agreement for Gabon's 328-sq km onshore Ofoubou block, 40 km west of Rabi-Kounga field. Occidental Petroleum Corp. drilled a well on Ofoubou in 1992, which cut a 70 m oil column but was not tested. License partners are operator Energy Africa Gabon 60%, Gentry International (Gabon) Inc. 35%, and Thomson & Van Eyck International (Gabon) Pty. Ltd. 5%. Energy Africa recently clinched a deal giving it a share in much of Gabon's exploration licenses (OGJ, Feb. 3, 1997, p. 31). Gentry is negotiating other deals in the area.

Italy's Agip SpA and Algeria's state-owned Sonatrach agreed to explore jointly a new 2,300-sq km area in southern Algeria. Area 213 is in the middle of the Sahara desert, 900 km south of Algiers and 400 km south of Hassi Messaoud. Processing equipment and pipelines nearby will allow the companies to begin production quickly if commercial discoveries occur. Agip jointly produces with Sonatrach 50,000 b/d of oil in Algeria.

MMS will hold federal lease Sale 149 June 11 covering acreage in Alaska's Cook Inlet. The sale will be held in the Wilda Marston Theatre in Anchorage. MMS is offering 101 whole and partial blocks, encompassing about 430,000 acres. The northern boundary of acreage is at Kalgin Island and the southern boundary is about 15 miles north of the entrance to Kachemak Bay.

Petrochemicals

Saudi Methanol Co., a unit of Saudi Basic Industries Corp., let contract to Mitsubishi Heavy Industries Ltd., Tokyo, to build a new chemical-grade methanol plant at its Al-Jubail complex. The 850,000-metric ton/year capacity plant is due to come on stream in May 1999. The unit will be the fourth methanol plant at Al-Jubail, increasing the company's total methanol production capacity to 3.1 million metric tons/year.

Formosa Plastics and other petrochemical producers in Kaoshiung's Tashe and Jenwu industrial zones in Taiwan face combined losses of more than $11 million from a 2-min power outage on May 29. A malfunctioning power transmission system forced 10 petrochemical producers in the two zones to suspend operations for up to 2 hr. China Petroleum Corp.'s refinery also had losses, estimated at $3.6-11 million. Taiwan Power Co. plans no compensation for damages unless it resulted from human error. Its policy only addresses damages for outages of 1 hr or more.

BP Chemicals Ltd. will expand polystyrene production capacity at its Wingles plant in northern France. When the program is completed in 1999, expandable polystyrene plant capacity will rise to 90,000 metric tons/year from 70,000 tons/year; polystyrene capacity will climb to 200,000 tons/year from 120,000 tons/year. BP recently set up a joint venture with ABB Lummus Global Inc., Bloomfield, N.J., to promote and license BP's polystyrene and expandable polystyrene manufacturing technology (OGJ, May 12, 1997, p. 39).

Borealis AS, Copenhagen, will boost production capacity at its polyethylene plant at Porvoo, Finland, to 140,000 metric tons/year from 120,000 metric tons. The $6.8 million expansion will be done during a 2-week shutdown late in summer 1998. The plant opened in 1996 and uses Borealis' proprietary Borstar production process.

South Africa's Sasol Ltd. will build a $50 million, 50,000-metric ton/year plant to separate and purify Octene-1. The complex is slated to begin production in first quarter 1999 at Sasol's coal-to-chemical complex at Secunda, South Africa. Dow Chemical Co. and Sasol signed an agreement covering the plant's entire output. A second phase of the project calls for another 50,000-metric ton/year plant, slated for start-up in 2001.

Refining

An explosion triggered by gas leaking from an oil filtering system hit China Petroleum Corp.'s Taoyuan refinery May 29, injuring one worker. No major damage to the refinery resulted, but windows and doors of several nearby plants were blown out by the force of the blast. Area residents are demanding closure of the refinery in the wake of the blast, one of four incidents in less than 10 months. Two members of Taiwan's government watchdog agency agreed to investigate the refinery's safety procedures.

Gas marketing

Coral Energy LP, Houston, and Shell Canada Ltd., Calgary, closed their agreement to form a natural gas marketing alliance (OGJ, May 20, 1996, p. 34). Coral now markets Shell's gas production of about 800 MMcfd, boosting total marketed volumes to about 6.9 bcfd. As part of the deal, Shell Canada gained a 12% equity interest in Coral, which was formed by Shell Oil Co. and Tejas Gas Corp. (OGJ, Apr. 21, 1997, p. 19).

Shell U.K. Ltd. bought a 50% share in U.K. gas marketing joint venture Quadrant Gas Ltd. from partner Esso U.K. plc. Quadrant, the first independent marketer to deliver natural gas to industrial and commercial users in U.K.'s liberalized gas market, holds a 6% share of U.K.'s commercial and industrial gas market. In 1995, Quadrant made a $2.4 million profit.

Drilling-production

Norsk Hydro AS, Oslo, Troll project operator in the Norwegian sector of the North Sea, signed a letter of intent with AMM Offshore Technology A/S for delivery of a first-of-its-kind subsea unit for separating and injecting water into wells in the Troll oil and gas producing province. The unit, to be installed in summer 1999 in 340 m of water, will separate water from up to eight production wells and reinject it into the reservoir to reduce fluid processing capacity requirements and platform equipment weight. It also will reduce produced water discharges, yielding environmental gains.

Houston Exploration Co. evacuated all personnel when its C-1 well blew out May 31 on East Cameron Blocks 82/83 in the Gulf of Mexico, about 40 miles southeast of Cameron, La. There were no injuries, and no fire or pollution resulted from the incident. Measures were under way at presstime to control the well's flow to the surface. The well was expected to produce 6-8 MMcfd of gas.

Sasol Petroleum International Pty. Ltd., Johannesburg, signed a memorandum of understanding with Mozambique's state oil firm, Empresa Nacional de Hidrocarbonetos de Mo?ambique (ENH). The accord gives Sasol rights to negotiate a production-sharing agreement for the 45,000-sq km Mazenga block onshore Mozambique, about 250 km north of Maputo in Inhambane and Gaza provinces. The deal is part of Sasol's plan to build up assets in southern Africa (OGJ, Mar. 17, 1997, p. 23).

Norway's Den norske stats oljeselskap AS (Statoil) intends to develop Heidrun North discovery in the Norwegian Sea as a subsea satellite of its Heidrun tension-leg platform. The company expects to produce 20,000-40,000 b/d of oil from the satellite as early as summer 1999. Statoil plans to drill an appraisal well this year or next to clarify reserves. The satellite lies 10 km northeast of Heidrun Block 6507/7.

BHP Petroleum Pty. Ltd., Melbourne, reinstituted Lennox oil and gas field production in U.K. Block 110/15 after replacing a pipeline carrying associated gas from nearby Douglas field center for reinjection. The 32-km, 12-in. pipeline was replaced after BHP found faults in a 1.2-km section during a June 1996 routine inspection. Output from Douglas and Lennox will be restricted to 10,000 b/d while commissioning work on the Douglas processing platform is completed. Oil production from Douglas alone recently has been more than 50,000 b/d.

A pinhole-sized leak of natural gas in equipment being used for a horizontal gas well recompletion caused a precautionary evacuation of about 300 Washington County, Tex., residents June 4. No fire or injuries occurred. The well is operated by Shield Petroleum Inc., a unit of Reata Oil & Gas Corp., College Station, Tex., according to the Texas Railroad Commission. The leak was repaired the same day, and residents were allowed to return to their homes.

Spills

Russia's government received a loan from the International Bank for Reconstruction & Development to help carry out oil spill recovery and mitigation in the Komi region of Siberia (OGJ, Jan. 15, 1996, p. 14). Production firm Komineft called for bids to deliver and install a 7.2-million metric ton/year oil treatment plant in Kharyaginskoye oil field, 170 km north of Usinsk. Bids are being handled by Moscow-based Geningconsult.

Companies

Elf Exploration U.K. plc let a 5-year contract to Kvaerner Oil & Gas Ltd., London, for maintenance, operations, engineering, construction, and support services. The contract, worth $32 million over the first year, covers operations in Elf's Piper, Saltire, and Claymore fields in the U.K. North Sea, as well as Elgin and Franklin fields under development.

Environment

U.S. EPA will not extend the Dec. 22, 1998, deadline for upgrading, replacing, or closing underground storage tanks. On that date, operators must meet federal requirements for protection against spills, overfills, and corrosion. EPA said it would work with states to develop plans to deal with tank owners and operators who fail to meet the deadline.

EPA will make Phoenix a new area for use of reformulated gasoline on Aug. 1, due to a local decision to opt into the program. The first phase of the RFG program will yield an estimated 15-17% reduction in ozone-forming and toxic air emissions from vehicles.