INDUSTRY BRIEFS

Correction

A chart incorrectly reversed data on U.S. and Canadian well depths (OGJ, June 9, 1997, p. 21). The depths denoted by the red bars should be Canadian wells, and the blue bars represent U.S. wells.

Cogeneration

Nova Chemicals, a unit of Calgary-based Nova Corp., will apply to Alberta regulatory agencies to build a cogeneration plant at its Joffre, Alta., petrochemical complex. The $200 million (Canadian) plant would supply more than 200 MW-hr of electricity and enough steam for the entire Joffre complex, including planned ethylene and polyethylene units.

Petrochemicals

Montell Polyolefins BV signed a memorandum of understanding with Machino Plastics Ltd., Gurgaon, India, to form a joint venture to develop, produce, and market polyolefins for India's market. The venture will use Machino's compounding plant. The complex started up earlier this year with capacity of 5,000 metric tons/year but is designed for expansion to 20,000 tons/year as the market develops.

Montell set up a polyolefins joint venture in Thailand with Thai firm HMC Polymers Co. Ltd. and Japan Polyolefins Co. Ltd. The venture, known as MBJ Advanced Polymers Co. Ltd., will supply polypropylene-based advanced materials to Thailand's automotive, appliance, construction, and packaging industries. The company soon will begin building a 10,000 metric ton/year compounding plant in Rayong province. Completion is due in 1998.

Drilling-production

Nederlandse Aardo* Maatschappij BV (NAM) let contract to Stork Engineers & Contractors BV for design, procurement, and project management services for development of as many as five natural gas fields in the western Netherlands. The contract is valued at $15 million during the next 5 years if all five of the so-called Green fields are developed. NAM plans to sign more framework-type agreements with two other concerns, a multidisciplinary construction contractor and a supplier of integrated control/safeguard systems. The first field to be developed will be Gaag II, near Maasland.

Azerbaijan International Operating Co. (AIOC) and BP Exploration Ltd. let contract to Caspian Drilling Co. Ltd., a unit of Santa Fe International Corp., Dallas, to operate the Dada Gorgud and Shelf 5 semisubmersible drilling rigs for a combined term of as long as 3,000 days, marking the first time a Western drilling contractor will operate in the Azerbaijan sector of the Caspian Sea. AIOC and BP are initial parties to the drilling contracts, under a rig-sharing agreement that includes Caspian International Petroleum Co. and North Absheron Operating Co. Ltd.

Global Marine Inc., Houston, will acquire two more deepwater offshore drilling rigs from Maersk Drilling, Copenhagen. It will pay $150 million for Maersk Vinlander and $100 million for Maersk Jutlander. Both rigs are third-generation semisubmersibles rated to drill in less than 1,500 ft of water but upgradable to more than 3,000 ft of water. Maersk Vinlander currently operates in the U.K. North Sea under bareboat charter through January 1998. Maersk Jutlander will continue to operate in the Norwegian North Sea for Maersk under a $71 million, 3.5-year bareboat charter.

Tuskar Resources plc, Dublin, spudded Obe-4 appraisal well on OML 110 concession off Nigeria. The well is intended to reach total measured depth of 9,450 ft, cutting oil pays tested by earlier wells to assess a deeper find. The well is being drilled by Glomar Adriatic X jack up rig in 67 ft of water and is to be tested by the end of July.

Mesa Inc., Irving, Tex., completed a five-well drilling program in its East Cameron 322/323 field, 95 miles off Louisiana in 220 ft of water. Combined test rates from the five wells totaled more than 6,000 b/d of oil and 13 MMcfd of natural gas from multiple pay zones at 3,600-5,400 ft. Production began in mid-June at a cost of $18.4 million vs. initial estimates of $19.5 million. Mesa holds 100% interest in the field.

Petroleo Brasileiro SA let a $20 million contract to Kvaerner Oil & Gas Ltd., London, for supply of a subsea production manifold for installation in 1,000 m of water in the Campos basin's Marimba oil field off Brazil. It will mingle output from eight wells and be tied back to a floating production unit.

Companies

Enron Corp., Houston, closed its $4 billion merger with Oregon's Portland General Corp. to form a new integrated energy giant. Portland General gives Enron power transmission assets close to California, where the electricity market is slated for full deregulation next year. The deal was one of the first gas/electric megamergers proposed and the first to receive approval by the U.S. Federal Energy Regulatory Commission this past winter under new merger guidelines (OGJ, Feb. 3, 1997, Newsletter).

Crestar Energy Inc. agreed to acquire for $336.2 million (Canadian) Grad & Walker Energy Corp. Both are Calgary firms. The total value of the deal would be $398 million, including assumption of debt, and Crestar would get tax credits worth $165 million. Crestar currently produces about 74,000 b/d of oil equivalent (boed), which would increase to 86,000 boed with the purchase and average 102,000 boed in 1998. Grad & Walker has substantial heavy oil properties in the Marengo and Mantario areas of Sas- katchewan.

Canadian Fracmaster Ltd., Calgary, hiked its interest to 50% in Samotlor Services, based in western Siberia, by acquiring another 25% interest from a unit of PanCanadian Petroleum Ltd., Calgary. Fracmaster's output of crude oil from the Samotlor project is expected to increase to 7,500 b/d, bringing average production from several Russian ventures to 28,400 b/d.

Tankers

The first shuttle tanker for the Hibernia oil field project off Newfoundland was completed in a South Korean shipyard. The 127,000 dwt M/T Kometic will carry 850,000 bbl of crude per trip from the Hibernia platform to a Newfoundland transshipment terminal. The vessel is expected in Canadian waters in October for trials. It is specially equipped to operate in icy waters with a strengthened double hull, twin 13,000-hp engines, and variable pitch propellers and thrusters.

Pipelines

Nissho Iwai Corp. joined a gas pipeline project in Thailand, signing an agreement to set up a joint operating company with the Petroleum Authority of Thailand and Unocal Corp. by yearend. Plans call for an $879 million, 1,000-km pipeline between Rayong near the Gulf of Thailand and Udon Thani, northeast of Bangkok. The Japanese firm projects Thai gas demand at 800 MMcfd-1 bcfd and supports a Thai government plan to establish an electric power plant and factories to develop the remote area. The joint venture also plans to lay optical fiber cable alongside the pipeline for telecommunications.

IPL Energy Inc. and Suncor Energy Inc., both of Calgary, combined their respective pipeline proposals (OGJ, May 20, 1995, p. 25) into a single $325 million (Canadian) project to lay a 500,000 b/d-plus capacity oil pipeline from the Athabasca oilsands region of Alberta. The 30-in. pipeline will start near Fort McMurray and extend south through the Cold Lake region to Hardisty, Alta., where it will link with other pipelines. Pending regulatory approvals, construction is slated to begin late this year with completion targeted for late in 1998. Suncor will operate the combined project initially.

Alyeska Pipeline Service Co. closed Pump Station 2 on July 1 due to the continuing decline in North Slope oil production (OGJ, May 5, 1997, p. 54). Throughput will not be affected. Employees at the pump station, 57 miles south of Prudhoe Bay oil field, are being reassigned. Alyeska's ramp-down plan calls for Pump Station 6 to be closed in early August.

Finland's Neste Oy and Russia's Gazprom set up a joint venture to study the feasibility of building a pipeline to take Russian gas to central Europe through Finland. The 50-50 venture is called North Transgas Oy and is expected to complete its plan by autumn 1998. Route options are through western Finland to Sweden and on to Germany or via Finland across the Baltic Sea to Germany.

Gas distribution

BG plc will acquire a 44.31% interest in India's Gujarat Gas Co. Ltd. from Mafatlal Industries Ltd. and Hindustan Oil Exploration Co. for $41.2 million. India's takeover rules require that BG secure bids for a further 20% of Gujarat Gas shares, which is expected to raise as much as $18.6 million. Gujarat Gas operates 1,000 km of pipeline to serve 300 industrial, 800 commercial, 74,000 residential, and 600 compressed natural gas customers in Surat, Ankleshwar, and Bharuch. The purchase provides a link with its other projects in Gujarat, including a planned gas-fired power plant at Pipavav and a proposed liquefied natural gas import scheme.

Exploration

U.S. Minerals Management Service postponed until 2001 an Alaskan Cook Inlet offshore lease sale, No. 173, which had been scheduled for 1999. MMS explained that personnel working on the pre-sale process instead would help the Bureau of Land Management with geologic and environmental impact evaluations for a proposed lease sale in the National Petroleum Reserve-Alaska (OGJ, Jan. 20, 1997, p. 33).

Apache Corp., Houston, will operate an exploration project on northwestern Australia's continental shelf in the Leatherback farmin area and on EP 342 permit. The areas cover 1,150 sq km. Plans call for three exploratory wells by the end of next year, starting work in November. Apache's partners include Mitsubishi Corp.'s Diamond Gas Resources Ltd. (DGR) unit, Boral Energy Resources Ltd., Carnarvon Resources, and Asamera Australia Ltd. The group hopes to begin oil production in 1999. DGR will contribute 40% to the cost of drilling Leatherback and 15% of the cost of drilling EP 342.

Gas processing

Malaysia's state-owned Petronas Cariga* Sdn. Bhd. will bring two new gas processing plants on stream in May 1998 at Tok Arun, Terengganu, each able to process 500 MMcfd, with maximum potential combined capacity of 1.5 bcfd. The $643.26 million complex is 65% complete. Combined with Petronas' four other plants at Kertih, Malaysia, will have 2.7 bcfd maximum gas processing capacity. Petronas also will build two new pipelines. The first, slated for completion by 2000, will extend 510 km to link Kertih, Kuantan, and Port Klang. The second, a 710-km line, will link Pulau Pinang, and Pauh with Kertih.

Petroleos Mexicanos (Pemex) restarted its Cactus, Mexico, natural gas plant damaged a year ago in an explosion that killed seven people (OGJ, Aug. 5, 1996, p. 22). New plant inlet capacity is 630 MMcfd, up from 500 MMcfd. The blast knocked out two units and cost Pemex about $200 million in lost production and repairs. Unit No. 1 was rebuilt with improved technology to handle gas feeds that two units handled before the incident.

Refining

France's Technip group signed contracts that will bring into action plans for the $1 billion, 100,000 b/d Midor refinery at Alexandria, Egypt (OGJ, Sept. 2, 1996, p. 41). The refinery, based on a high conversion scheme, includes hydrocracking and delayed coker technologies. One contract, with the Egyptian-Israe* Midor joint venture (JV), covers equipment supply, engineering, and construction of the process units. The second, signed with Egyptian JV group Mitap, covers engineering, equipment supply, and construction of utilities and offsites. Both JVs are led by state-owned Egyptian General Petroleum Corp.

Reliance Industries Ltd., Bombay, let contract to Foster Wheeler Corp., Clinton, N.J., to design and engineer what Reliance claims will be the world's largest delayed coker unit and develop a power plant next to a new refinery at Jamnagar, India. The delayed coker will use Foster Wheeler's proprietary Sydec technology for upgrading low-value residual oil into higher-valued aromatics and petrochemical feedstocks. The unit will have eight coke drums with the largest diameter ever used in delayed-coking and be able to produce about 6,800 short tons/day of fuel grade coke. Byproduct coke will be used as fuel for a new power plant next to the refinery. The companies declined to provide details on the refinery's capacity or target completion date.

LNG

Qatar's Ras Laffan (Rasgas) plans to have six liquefied natural gas carriers built by South Korean firms Hyundai Heavy Industries, Hanjing Heavy Industries, Daewoo Heavy Industries, and Samsung Shipbuilding Co., according to press reports from Doha. Each vessel would have 130,000 cu m capacity and cost $250 million. The contracts follow signing of a 25-year contract for Rasgas to double LNG shipments to Korean Gas Corp. to 4.8 million metric tons/year starting in July 1999.

Gas gathering

El Paso Energy Corp., Houston, signed long-term agreements with San Juan basin producers Burlington Resources Inc., Amoco Production Co., and Conoco Inc. under which El Paso will provide new global compression services that reduce field delivery pressures and increase output by 130 MMcfd. The $50 million project includes installing about 36,000 hp of field compression with 10 new compressor units at five locations, which will lower average wellhead pressure to 150 psi along 70% of its high-pressure gathering system, affecting about 3,000 wells. Most of the added volumes will be delivered to El Paso's Chaco, N.M., cryogenic processing plant. El Paso also will add 56 miles of pipeline. Work is slated for completion by mid-1998.