Industry Briefs

Power

NRG Energy Inc., Minneapolis, a subsidiary of Northern State Power Co., and Indeck Energy Services Inc., Buffalo Grove, Ill., obtained financing from ABN AMRO Bank NV for their north London $335 million Enfield Power project. Developed by Enfield Energy Centre Ltd., a joint venture of NRG and Indeck, the 396 MW combined-cycle, gas fired electric power generation plant will begin operations in third quarter 1999.

Companies

Meridian Resource Corp., Houston, agreed to acquire Shell Oil Co.'s southern Louisiana onshore properties for 23.7 million shares, or about 40% of Meridian stock, plus $42.5 million in cash. Shell also will nominate a seat on Meridian's board. The transaction will also include 210,000 gross (98,000 net) acres of Shell properties under production, lease, or option for exploration; all of Shell's onshore southern Louisiana exploration prospects; about 1,400 sq miles of 3D seismic data held or being acquired by Shell; and access to all of Shell's proprietary 2D seismic grid covering southern Louisiana. The onshore assets will generate about $70 million in cash flow this year.

Pioneer Natural Resources Co.,
Dallas, completed acquisition of Chauvco Resources Ltd., Calgary, for $1.3 billion (Canadian). Pioneer says it will spend about $100 million (U.S.) on developing Chauvco properties in Argentina and $65 million (U.S.) to drill 100 wells on Chauvco properties in western Canada.

McDermott International Inc.
affiliate J. Ray McDermott SA terminated the HeereMac joint venture, effective Dec. 19. Under an agreement between J. Ray McDermott and its partner, Heerema Offshore Construction Group Inc., Heerema assumed J. Ray McDermott's 50% interest in the JV for $318.5 million cash and title to certain equipment, including launch barges and the DB-101, a 3,500-ton capacity, semisubmersible derrick barge. The equipment will be available in spring 1998.

Castle Harlan Partners III LP
agreed to acquire the natural gas compression business of Tidewater Inc., New Orleans, for $360 million. The sale of Tidewater Compression Service Inc. equals a one-time gain of $1.06/share.

Grey Wolf Inc.,
Houston, will acquire Murco Drilling Corp., Shreveport, La., for $56.4 million in stock and cash, provided Murco's liabilities do not exceed $8.6 million. Grey Wolf has an option of paying as much as $10 million in Grey Wolf shares, with the remainder in cash. Murco operates 10 onshore drilling rigs in East Texas, Louisiana, Mississippi, and Alabama.

Drilling-production

Schlumberger Ltd.'s Sed Forex business unit signed contracts for two of its Sedco Express semisubmersible drilling rigs for deepwater drilling in the Gulf of Mexico and West Africa for 5-year periods. Currently under construction outside the U.S., the rigs will be delivered to Texaco Inc. and Elf Aquitaine late in 1999. Texaco's design specifications require a semi rated to 10,000 ft of water. Elf will use the 7,500-ft water-depth rated rig off West Africa.

Total SA
began oil production in Kharir field on Yemen's East Shabwa block about 500 km east of Sanaa. Total estimates production will reach a plateau of 20,000 b/d in January. The company discovered three fields on the 16,000 sq km block: Kharir and two satellites, Atuf Northwest and Wadi Taribah. Total says a second phase of development on the block will be decided in late 1998, depending on the first year's production history and additional data obtained on the reservoirs.

Phillips Petroleum Co. Norway
let a 1.2 billion kroner ($165 million) contract to Aker Maritime AS, Oslo, for engineering, construction, and installation of an injection platform in Eldfisk field in Norwegian North Sea Block 2/7 (OGJ, Dec. 22, 1997, Newsletter). The new 2/7E platform will inject water and gas to boost oil recovery from Eldfisk. Water injection begins in January 2000, with gas injection beginning in May 2000. The jacket will stand 93 m high and hold a 6,000 metric ton topsides.

A fire at Santos Ltd.'s
Watson oil tank farm, 60 km south of Jackson in southwestern Queensland, killed two contract employees, severely injured a third, and caused oil production from the Naccowlah block to be shut in. Reports that the fire occurred as welders worked on storage tanks are yet to be confirmed. Production disruption from the Cooper/Eromanga basin fields is expected to be minimal.

Seven Seas Petroleum Inc.'s
Tres Pasos 1-E delineation well, on Colombia's Rio Seco block, flowed at a maximum rate of 13,123 b/d of oil and 5.97 MMcfd of gas with no water from perforations over 288 ft of pay in upper Cretaceous Cimarrona. Meanwhile, Houston-based Seven Seas began drilling its Tres Pasos 2-E well to satisfy a 3-year drilling obligation to state firm Ecopetrol. The delineation well is 9 miles northwest of Rio Seco block discovery well, El Segundo 1-E. Operator GHK Co. Colombia, a wholly owned subsidiary of Seven Seas, has a 57.7% interest in the Emerald Mountain project, which includes Dindal and Rio Seco blocks.

Mobil Exploration & Producing U.S. Inc.,
operator with a 56% working interest, completed the A.R. Romaine 1 well in Kaplan field in Vermillion Parish, La. The well was drilled to 17,100 ft and logged 48 net ft of Camerine gas/condensate pay. The well flowed at a rate of 19 MMcfd of gas and 1,100 b/d of condensate. Noble Affiliates Inc. unit Samedan Oil Corp. holds a 23.2 % working interest in the well.

Qatar General Petroleum Co.
let contract to National Petroleum Construction Co. of Abu Dhabi for engineering, procurement, and construction of five wellhead platform jackets, 34.6 km of pipelines, and 4 km of umbilical lines in Bul Hanine and Maydan Mahzan fields off Qatar. The contract includes minor onshore work in Halul field.

Gas storage

Amoco Netherlands BV began operating the company's first European gas storage facility at Alkmaar, the Netherlands, on Dec. 10. The facility will deliver 24 million cu m/day of gas by 2000 and store up to 3.6 billion cu m in the depleted Alkmaar reservoir operated by Amoco for the past 25 years.

New York State Electric & Gas Corp.,
Ithaca, N.Y., completed Phase III of the Seneca Lake storage project, providing what it says is the first high-deliverability natural gas storage cavern in the U.S. Northeast. Phase III added two 2,587 hp compressors, increasing deliverability to 145 MMcfd from about 80 MMcfd. The U.S. Federal Energy Regulatory Commission approved the company's application to provide 80 MMcfd of capacity to southern and central New York customers with 65 MMcfd available for short-term firm and uninterruptible contracts to interstate markets.

Oilsands

Amber Energy Inc., Calgary, acquired a 100% interest in 102 sections of Crown Oil Sands Development (COSD) leases in Alberta's Wabasca/Pelican Lake area for $16,907,000 (Canadian). Amber now holds an average 98% interest in 313.5 sections of contiguous COSD leases there.

Exports-imports

Conoco (U.K.) Ltd. agreed to supply 1 billion cu m/year of gas to Nederlandse Gasunie NV from Apr. 1, 1999, to Oct. 1, 2007. The gas will come from one of Conoco's U.K. North Sea gas fields and be delivered to the Dutch state gas supplier via the Interconnector pipeline from the U.K. across Belgium to the Netherlands. Conoco is the first Interconnector stakeholder to secure a contract for supply of U.K. gas through the pipeline to continental Europe (OGJ, Feb. 26, 1996, Newsletter).

Exploration

Atlantic Richfield Indonesia Inc.'s Ubadari 1, off Irian Jaya, found gas 30 miles southwest of previous ARCO discoveries. The well, in 63 ft of water in Berau Bay, flowed at a combined rate of 45 MMcfd from four drill stem tests of Jurassic and Paleocene formations. The well produced from the same formations that produced exploration successes in eastern Indonesia for ARCO in the Berau and Wiriagar blocks. Participants in the Berau block are ARCO 48%, Occidental Berau of Indonesia Inc. 22.856%, Nippon Oil Exploration Berau Ltd. 17.144%, and KG Berau Petroleum Ltd. 12%.

Fugro-Geoteam AS,
a Norwegian company, completed 1,030 km of 2D seismic in the Baltic Sea to confirm and upgrade data from previously mapped structures that are apparent extensions of onshore Lithuania discoveries. More detailed 3D surveys and exploratory drilling are likely to follow Lithuania's first onshore licensing round, to be announced next year. More than 40 possible small-to-medium structures have been identified off Lithuania, and two wells have found oil in shallow Cambrian. Water depths are 20-70 m.

Apache Corp.
tested the Jaubert 1 discovery on the WA-1-P Legendre block off Western Australia. The well flowed at a rate of 6,300 b/d of 44.5° gravity oil through a 52/64-in. choke with 1,043 psi flowing tubing pressure, restricted by surface equipment limitations. The well cut 113 ft of net oil pay in two zones of lower Cretaceous Legendre. The lower zone tested through perforations at 6,270-6,301 ft. The upper zone, also oil-bearing, was not tested. Working interests in the block are well operator Apache 31.5%, block operator Woodside Petroleum Ltd. 26.94%, Santos Ltd. 22.56%, and Shell Australia Ltd. 19%.

LNG

Pertamina, Indonesia's state oil company, let a 15-year liquefied natural gas transportation contract worth $180 million to PT Humpuss Intermoda Transportasi Tbk., a subsidiary of Humpuss Group's Tommy Hutomo Mandala Putra unit. Under the contract, Humpuss Intermoda will join with Pertamina to build an $80 million LNG carrier with capacity of 22,500 cu m. Japan's NKK Corp. will build the carrier in Japan, with start-up of LNG deliveries to Hiroshima, Kagoshima, and Osaka, Japan, slated for third quarter 2000. Humpuss Intermoda will operate the carrier.

LPG

China National Chemical Supply & Sales Corp. and U.S. firms UGI Corp. and Energy Transportation Group Inc. signed an exclusive agreement to develop an integrated operation for importing, storing, and distributing propane along China's Yangtze River. Under contract terms, the companies also will evaluate possible joint ventures in two primary markets along the river to further project development.

Petrochemicals

Chiyoda Corp., Yokohama, let a $1.2 million contract for 13 modular steel buildings to Zamil Steel, a division of the Hamad Zamil Group of Cos., Saudi Arabia, for the $600 million methyl tertiary butyl ether plant being built at Qatar's Mesaieed industrial park.

Bitterfelder Chlor-Alkai GmbH,
jointly owned by Akzo Nobel Holland and Preussag, let a 110 million deutschemark design and construction contract to Krupp Uhde GmbH, Dortmund, to build a chlor-alkai electrolysis plant at the Bitterfeld industrial estate in Saxony-Anhalt. The turnkey plant with capacity of 3 million metric tons/year of caustic soda solution, will use Hoechst-Uhde membrane technology.

ARCO Chemical Co.,
Newtown Square, Pa., reached a conditional settlement with Repsol Quimica SA over the use of technology for the production of propylene oxide and styrene monomer in Spain. The dispute led the two companies to an arbitration at the International Chamber of Commerce, Paris, and to the Directorate-General for Competition of the European Commission and the Spanish Bureau for the Defense of Competition. The settlement is conditional on approval by the latter two authorities.

Bataan Olefin & Polymer Corp.
(BOPC), Manila, will develop, own, and operate a naphtha cracker at the Greenfield Development petrochemical and industrial park in Mariveles, Bataan. Sumitomo Corp., Mitsubishi Corp., Kellogg Development Corp., and Profinda Holdings Ltd. will provide engineering and construction services for the project. The plant will provide feedstock to local petrochemical plants to produce polypropylene and polyethylene starting early in 2001.

Pipelines

Norsk Hydro AS, Oslo, operator of the Troll oil and gas field development, let a 102 million kroner gravel-dumping contract to AS Jebsens ACZ, Bergen, to protect subsea pipelines in the Troll producing area. Jebsens' Tertnes service vessel will undergo renovations to handle work commitments under the contract during 1998-2000.

Crossroads Pipeline Co.,
a subsidiary of Nipsco Industries Inc., and CNG Transmission Corp. and East Ohio Gas Co., both subsidiaries of Consolidated Natural Gas Co., proposed to deliver natural gas from U.S. and Canadian supply basins through the Chicago area to eastern U.S. markets. Crossroads said a 20-mile pipeline to provide a link from Chicago to the eastern U.S. via Crossroad's existing interconnection with Natural Gas Co. of America could be in service by late 1999. Crossroads also has interconnections with Panhandle Eastern Pipeline Co., Trunkline Gas Co., and Columbia Gas Transmission.

Wyoming Interstate Co. Ltd.
(WIC), a 100% owned pipeline affiliate of Coastal Corp., Houston, asked FERC for permission to expand its capacity by 52 MMcfd to 755 MMcfd by November 1998. The expansion will add capacity on the Powder River Basin Lateral Pipeline owned and operated by Coastal's Colorado Interstate Gas Co. Application follows a 40% increase in WIC's capacity completed in August and brings the company's total capacity increase to 50% this year.

U.S. Department of Transportation
ruled operators of onshore gas and hazardous liquids pipelines will participate in "one-call" systems. Effective May 18, the ruling is designed to reduce excavation damage by outside parties, the largest single cause of pipeline failures.