INDUSTRY BRIEFS

Petrochemicals

Brazil's Petroquimica Triunfo SA signed a letter of intent to purchase a license from BP Chemicals Ltd. for its Innovene gas phase polyethylene production process. Triunfo plans to build a plant to produce 130,000 metric tons/year of high-density and linear low-density polyethylene at its Porto Alegre complex, where the company already makes low-density polyethylene. The new plant is due on stream in 1999.

Saudi Arabian Fertilizer Co., a unit of Saudi Basic Industries Corp., let a $400 million contract to Tecnimont SpA, Milan, to construct a 500,000-metric ton/year ammonia plant and a 600,000-ton/year urea plant at Al Jubail, Saudi Arabia, (OGJ, Jan. 13, 1997, p. 29). The plants are due on stream by yearend 1999.

BP Chemicals Ltd. and Malaysian state petroleum company Petroliam Nasional Sdn. Bhd. (Petronas) plan to build a 500,000-metric ton/year acetic acid plant at Kuantan, Malaysia. The plant, to be owned 70% by BP and 30% by Petronas, is expected to cost $200 million and is due on stream at yearend 1999. BP will provide its Cativa acetic acid process and operating and marketing resources; Petronas will provide feedstocks, including methanol and carbon monoxide, and utilities. Output will be sold in Malaysia and Southeast Asia.

Refining

U.S. Environmental Protection Agency issued a rule modifying the reformulated gasoline baseline adjustment for refiners who produced JP-4 jet fuel in 1990. The rule also allows a baseline adjustment for refiners unable to acquire sweet crude that had been available in 1990 and allows an adjustment for refineries with extremely low baseline sulfur and olefin levels.

U.S. Commerce Department's Foreign Trade Zones (FTZ) Board received an application to grant Coastal Corp.'s Mobile County, Ala., refinery FTZ subzone status. The action would exempt the plant from paying customs duties on the foreign products used in its exports.

Companies

ABB Lummus Global Inc. and Texaco Inc. formed an alliance aimed at capturing a significant share of the growing European market for gasification technologies and facilities. The companies will work together to find opportunities to develop, license, build, own, and operate gasification plants, and provide related services and equipment. Alliance is targeting the power generation, refining and chemical sectors in all parts of Europe.

Novus Petroleum Ltd., Sydney, paid $183 million (Australian) for Melbourne-based Western Mining Corp.'s 30% stake in the East Spar gas field off Western Australia. East Spar is the third major WMC asset to be sold after the Thevenard Island oil and gas fields (OGJ, Nov. 4, 1996, p. 44) and U.S.-based Greenhill Petroleum Corp. (OGJ, Feb. 17, 1997, p. 30). Two further assets off the northwestern coast, as well as New Zealand's Kupe field, remain to be sold.

Plains Resources Inc., Houston, signed a definitive agreement to pay $25 million for all of Chevron Corp.'s interest in Montebello field in California's Los Angeles basin. The field now produces about 800 b/d of oil and 800 MMcfd of gas from 55 wells. The property adds about 20 million bbl of oil to Plains' proved reserves of 122 million bbl of oil equivalent.

BG plc, one of two companies created from the defunct British Gas plc, sold a 24.5% stake in its Northern Ireland subsidiaries to Brooklyn Union Gas Co., New York. BG's Phoenix Natural Gas Ltd. unit has an exclusive license to bring natural gas supplies to commercial and residential customers in the province. BG's Premier Transco Ltd. unit owns and operates the gas pipeline from Scotland to Northern Ireland, completed in August 1996, as well as Ballylumford power station.

Ocelot Energy Inc., Calgary, closed the sale of gas properties in British Columbia and Saskatchewan for about $88 million (Canadian), plus a prepayment of $31 million for terminating or restructuring certain long-term gas contracts, which Ocelot will repay by or before yearend. Proceeds will be used to eliminate long-term bank debt and back new projects in Gabon and Tanzania.

Pipelines

U.S. Federal Energy Regulatory Commission cleared plans by Texaco Inc. and Mapco Inc. to build the $300 million Discovery gas pipeline in the Gulf of Mexico . Completion is due late this year. FERC also reaffirmed its jurisdiction over a gas pipeline Shell Oil Co. is building from Mars field in the gulf but exempted the Manta Ray gathering system being built by Shell and others.

Exports-imports

Conoco (U.K.) Ltd. signed a contract with Belgium's Distrigaz SA for delivery of gas from the U.K. to Germany. Conoco was the first shareholder in the Interconnector pipeline-which will link the U.K. to Zeebrugge, Belgium-to secure a deal to sell U.K. gas in Europe. Distrigaz is installing new pipelines to deliver gas to four terminals on the borders of Belgium. Conoco is to send 3.28 bcf/year of gas to Germany's Wingas GmbH beginning in October 1998. Construction work has started on the Interconnector (OGJ, Nov. 25, 1996, p. 34).

Exploration

Elf Petroland BV disclosed two gas discoveries on North Sea Blocks K1a and K4a off the Netherlands. K1-3 discovery has a potential production rate of about 9.84 MMcfd from Lower Permian sands. K4-10 discovery in Carboniferous strata has potential to produce 4.48 MMcfd of gas. Development options are being studied, with production start-up expected soon.

Hunt Oil Co., Dallas, units signed an exclusive agreement with state-owned Ghana National Petroleum Corp.(GNPC) for exploration and production in the western Cape Three Points area of Ghana's Tano and Saltpond basins. The area is just south of one covered by another agreement Hunt signed with GNPC and the government in March 1996 (OGJ, Apr. 25, 1996, p. 37). Hunt plans to acquire and analyze seismic data after the agreement is ratified by Ghana's parliament.

Canadian Occidental Petroleum Ltd., Calgary, acquired a 47.5% interest in the oil and gas production contract covering the 240,000-acre Karang Besar block, as well as a 10% interest in the 1.66-million acre Maratua block in the Tarakan basin along the northeastern coast of Kalimantan. CanOxy will participate this year with operator Maersk Oil Indonesia, a unit of Denmark's A.P. Moller Group, in 1-Gosungan exploration well on the Karang Besar block. The well, to be drilled to 13,000 ft in 920 ft of water, will test an oil prospect targeting Oligo-Miocene carbonate reservoirs.

Union Texas Petroleum Holdings Inc., Houston, will acquire a 40% working interest in Contract Area 11/05 off China in Bohai Bay from Phillips China Inc. Phillips retains 60% and operatorship. Phillips made one noncommercial find in the block last year. It plans to drill two wells this year and two more in 1998-99.

Petro-Canada Inc.'s PC Garrington 4-8 discovery well in the Butte Prospect area of Alberta flowed on test 1,100 b/d of oil and 300 MMcfd of gas from 278 ft of Leduc reef pay, disclosed interest owner Arch Petroleum Inc., Fort Worth. Drilled to 11,500 ft TD and completed late in 1996, the well is to begin producing by second quarter 1997. PC Trax Garrington 10-7, an offset to this well, logged 239 ft of pay and is slated for completion this month, with production expected by June. Arch owns a 25% and 12.5% interest, respectively, in the wells.

Norcen Energy Resources Ltd., Calgary, drilled a new fault block discovery on Eugene Island Block 107 off Louisiana, reported interest owner Seagull Energy Corp., Houston. The No. 3 well, drilled to 17,350 ft, cut 125-165 ft of pay in seven zones separate from existing production in the Eugene Island 107/118 complex that presently produces about 285 b/d of oil and 17 MMcfd of gas. Seagull holds a 25.5% working interest in the discovery well. Other interest holders are Enserch Exploration Inc., Dallas, and Case-Pomeroy Oil Corp., New York.

Santos Ltd., Adelaide, and partners' former PPL 56 petroleum prospecting license in Papua New Guinea was renewed to a large extent, with the region being divided into two licenses. PPL 190 covers part of the Papuan fold belt and new Makas 1X oil discovery by the Chevron Corp.-led Niugini group in adjoining PPL 161. A speculative seismic survey will be run in the area, and Santos expects to drill a well there this year. PPL 189 contains the undeveloped Barikewa gas field in the Papuan basin. If commercial gas reserves are established, Santos plans to use gas either as feedstock for methanol production or in a proposed gas pipeline connecting Papua New Guinea to Queensland across the Torres Strait (OGJ, Oct. 21, 1996, p.28).

Gas marketing

Enron Europe Ltd., a unit of Enron Corp., Houston, acquired retail gas marketing company PanEnergy Services UK, Oxford, from PanEnergy Corp., Houston. Now called Enron Direct, the company has 2,600 small industrial and commercial customers at 4,200 sites.

Drilling-production

State Petroleum Corp. (SPC), a unit of Arakis Energy Corp., Calgary, signed an amended petroleum-sharing agreement for the Heglig, Unity, and Kaikang blocks in south central Sudan. SPC and partners plan at least 30 new development wells and 21 exploration wells before the start-up of a 250,000 b/d oil pipeline by yearend 1999. Partners are China National Petroleum Corp. 40%, Petronas Cariga* Sdn. Bhd. 30%, SPC 25%, and Sudepet Ltd. 5%.

PGS Exploration AS, Oslo, let a $10 million contract to ABB Stal AB, Finnspong, Sweden, for a gas turbine to generate electric power onboard a production ship. The 17-MW turbine will be installed in the Ramform design production, storage, and offloading vessel to be provided by PGS to Conoco (U.K.) Ltd. for development of Banff field off the U.K. (OGJ, Mar. 3, 1997, p. 31). The turbine will be delivered to the Ulsan shipyard in South Korea in January 1998 for installation.

Mobil Exploration & Producing

Turkmenistan Inc. acquired a 40% share in a production-sharing agreement for Nebit Dag license area in western Turkmenistan. The block covers 2,000 sq km near the Caspian Sea and contains five producing fields and additional exploration prospects. Operator Monument Oil & Gas plc, London, is acquiring seismic data over the entire block and hopes to start new production in the second quarter.

Dolphin DOC AS, Tananger, Norway, let a $28 million contract to Aker Maritime AS, Oslo, to deliver a RamRig drilling package in May 1998. The rig will be used in converting Borgland Dolphin semisubmersible from its current role as accommodation unit back to a drilling rig. The rig is being converted for a long-term charter by Norway's state-owned Den norske stats oljeselskap AS. A tight rig market has spurred the re-conversion of a number of rigs for active drilling (OGJ, Dec. 2, 1996, p. 25).

U.S. Minerals Management Service proposed to amend rules governing the production measurement and surface commingling requirements for Outer Continental Shelf gas. It said the changes reflect industry technology, require tracking of gas lost or used on the lease, and clarify the restrictions on surface commingling.

LNG

U.S. Energy Department's Fossil Energy Office received an application from Phillips Alaska Natural Gas Corp. and Marathon Oil Co. requesting a 5-year extension of their permit to export Alaskan liquefied natural gas to Japan. Companies have exported LNG from Alaska's Cook Inlet fields to Japan since 1967. The current permit allows exports of 64.4 trillion BTU/year through Mar. 31, 2004, for sale to Tokyo Electric and Tokyo Gas.

U.S. Transportation Department's Research and Special Programs Administration issued a rule updating liquefied natural gas rules. It is replacing the current "flammable vapor gas dispersion production method" with one based on the "dense gas dispersion" model, and the "thermal radiation protection" method with one based on the "LNGfire" program model.

Terminals

Fortune Oil plc, London, is to build a refined products tank farm and terminal at Jiangmen in China's Guangdong province for $6.5 million. The terminal will have capacity to store 40,000 cu m of products and have a jetty capable of offloading vessels with capacity as big as 3,000 metric tons. It will be sole supplier to nearby Xi Jiang power plant, which requires 150,000 metric tons/year of fuel oil initially, rising to 420,000 tons/year with expansion in 2000. Depot is slated to start operation in May 1997.

Spills

A Santa Fe Pacific products pipeline was shut down last week, as crews tried to contain a spill from an apparent line rupture in northern California's Sierra Nevada mountains, just east of Donner Pass. The spill was identified initially as a sheen on a pond near the pipeline, which connects refineries in the San Francisco Bay area to Sacramento and Reno. Detection was difficult because of 12-ft snowdrifts, but Santa Fe said a small break in the pipeline may have gone undetected for a long time, although monitoring equipment detected no interruption in product flow.

Ukrainian cleanup workers last week collected all but about 100,000 bbl of about 360,000 bbl of oil spilled by a Maltese tanker at Odessa's sea port Mar. 2. An international insurance club is preparing sanctions against the Maltese tanker captain.