Power
El Paso Energy International Co., an El Paso Energy Corp. unit, will build a 250-MW power plant at Manaus, Brazil. The $100 million project is the third in Brazil recently disclosed by the company. Others include a 150-MW power plant in Mato Grosso do Sul state and a 450-MW plant in Rio de Janeiro state. The Manaus project will be built in phases, beginning with a 44-MW unit slated to be operational by mid-November. The plant, to be fired initially by fuel oil, will be converted to combined-cycle operation ultimately, as will all the El Paso Brazilian plants. Eletronorte, operating unit of Brazil's Eletrobras utility, will buy the power.
Refining
Saudi Aramco and Hindustan Petroleum Corp. Ltd. (HPCL) let contract to ABB Lummus Global, Bloomfield, N.J., for a detailed feasibility study for a proposed refining/power complex at Bhatinda, Punjab, India. The project includes an oil terminal, a 1,000-km crude oil pipeline, a 120,000-180,000-b/d grassroots refinery, and an 860-MW power plant. HPCL now operates two wholly owned refineries in India with 200,000 b/d combined installed capacity and a 60,000 b/d domestic joint venture refinery.
U.S. Department of Energy selected Energy BioSystems (EBS), The Woodlands, Tex., to receive funding for a planned $2.4 million project dedicated to developing a biocatalytic desulfurization (BDS) system for gasoline. EBS said the award will allow it to accelerate development of a gasoline BDS process (OGJ, May 15, 1995, p. 39). The award includes $688,000 in first-year funding, with the remainder to be received during the next 2 years subject to congressional appropriation.
Abu Dhabi National Oil Co. (Adnoc) let two contracts to Snamprogetti SpA. The first is for a 280,000 b/d condensate refinery to be built next to Adnoc's existing Ruwais refinery. Included are downstream naphtha stabilization, kerosine sweetening, and LPG production units, expansion of utilities and offsites, and 23 storage tanks. The second contract is for construction of a condensate separation and stabilization plant. The plant will process 856 MMcfd of natural gas and recover 95,000 b/d of condensate from Asab field.
Oilsands
Imperial Oil Ltd., Toronto, plans to begin construction of its 30,000 b/d Mahkeses oilsands plant at Cold Lake, Alta., in mid-1998 instead of this fall (OGJ, Mar. 3, 1997, p. 40). The $500 million project expansion has been delayed almost 1 year because of a backlog of applications pending before the Alberta Energy Utilities Board.
Exploration
Elf Exploration Angola disclosed its 1 Dahlia find in 4,462 ft of water on Block 17, 3 km east of Elf's 1996 Girassol 1 discovery (OGJ, Apr. 14, 1997, p. 32). Production tests of two pay zones yielded a combined flow rate of 16,000 b/d of 23-24° gravity oil. Further appraisal is required to assess commerciality. The 1 Dahlia is the third exploratory well drilled on the block. Elf estimates reserves at 1 billion bbl. Interests are operator Elf 35%, Esso Exploration Angola 20%, BP Exploration (Angola) Ltd. 16.67%, Den norske stats oljeselskap AS 13.33%, Norsk Hydro AS 10%, and Fina Exploration MB BV 5%.
U.S. Minerals Management Service issued a final notice for Sale 168, which will offer 4,710 blocks in the western Gulf of Mexico on Aug. 27 in New Orleans. The sale is the second in the western gulf in which tracts in waters deeper than 200 m will be eligible for royalty relief provisions.
Drilling-production
Husky Oil Ltd., Calgary, signed an agreement with China National Petroleum Corp. (CNPC) covering enhanced oil recovery in Pucheng field, Henan province, about 342 miles south of Beijing. A Husky unit will spend $100 million during 5 years on EOR projects. The company expects to work with CNPC as it expands its operations to other fields in China. Husky says the Pucheng project will be the first full field development to be carried out in China by a foreign-operated company.
A gas well operated by Unocal Corp. in Attaka field off East Kalimantan, Indonesia, blew out and caught fire Aug. 17. About 100 workers were evacuated; no casualties were reported, and the cause was undetermined at presstime. The well is 147 km northeast of Balikpapan.
Pengrowth EnergyTrust, Calgary, agreed to acquire Imperial Oil Ltd.'s interests in three Alberta fields for $595 million (Canadian). Involved are a 98.1% interest in Judy Creek Beaverhill Lake, 94.6% in Judy Creek West Beaverhill Lake, and 20.2% in Swan Hills Unit No. 1. Imperial's net production from the three units is about 21,000 b/d of crude and 25 MMcfd of gas. The transaction is subject to approval by Swan Hills associates and Pengrowth's successful completion of an equity issue. Imperial retains a 2.5% gross override.
Overseas Private Investment Corp. signed a $116 million commitment letter covering Marathon Oil Co.'s participation in the Sakhalin II project off Russia's Sakhalin Island (OGJ, July 29, 1996, p. 38). OPIC estimates the project will use about $270 million in goods and services that will support almost 1,000 U.S. jobs.
DOE issued a draft supplemental environmental impact statement on the proposed sale of the U.S. government's 78% interest in Elk Hills field in Kern County, Calif. Written comments are being accepted until Sept. 8. DOE plans to sell its interest by Feb. 10 (OGJ, May 26, 1997, p. 24).
Exports-imports
U.S. Export-Import Bank signed an agreement with Azerbaijan that lays the foundation for possible financing of U.S. exports to the former Soviet republic. The pact provides a framework for financing U.S. sales to Azerbaijan where repayment is based on export revenues generated by the borrower, such as oil exports, rather than the sovereign guarantee of the debt by the host government.
Companies
Columbia Gas System acquired Alamco Inc., an Appalachian basin oil and gas producer, for about $101 million. The combined company will have at least 125 MMcfd of gas production extending from Tennessee to New York.
Indonesia's Pertamina will take over the coastal plain Pekanbaru oil field at Riau, Sumatra, from PT Caltex Pacific Indonesia when Caltex's contract expires in 2001, according to Pertamina officials. Caltex wanted to extend its 30-year contract, but the government refused after Caltex rejected a request to grant Pertamina a 10% share of the field's 77,000 b/d output.
Mitchell Energy & Development Corp., The Woodlands, Tex., will invest in its energy businesses $460 million of net after-tax proceeds from sale of its real estate subsidiary. Mitchell will use $100 million to repurchase common stock and $200 million to retire public debt. The remainder will be used to acquire producing properties and gas gathering/processing complexes and to increase capital spending on existing exploration and development programs.
Enron Corp. and Enron Global Power & Pipelines LLC (EPP) agreed to merge in a sweetened deal valued at $437.5 million, or $35/share, for the 12,500,000 EPP shares in the public market. Initially, the deal called for Enron to pay $32/share (OGJ, May 26, 1997, p. 30). EPP has about 26 million total shares outstanding, including 13.5 million held by Enron. EPP's oversight committee approved the merger, expected to be completed in fourth quarter 1997. It's subject to approval by a majority of EPP shareholders other than Enron.
Petrochemicals
PT Petro Indokimia Sentre, a Salim Group unit, is planning a $1.56 billion basic olefins plant, Indonesia's second, at an undisclosed site. The plant will produce 850,000 metric tons/year of ethylene, 425,000 metric tons/year of propylene, and several other chemicals. Completion is scheduled for 2001.
NGL
Koch Hydrocarbon Co., Wichita, and Union Pacific Fuels Inc., a unit of Union Pacific Resources Group Inc., Fort Worth, plan to boost production capacity at their Mont Belvieu, Tex., NGL fractionation complex. Expansion will hike output to 200,000 b/d from 105,000 b/d. Operator Koch has an 80% interest, Union Pacific the remainder. The project, slated for completion by August 1998, involves adding one fractionation column. Most of the capacity increase will come from Koch Engineering Co.'s ultra-fractionation tray technology.
Mapco Inc., Tulsa, and Enterprise Products Co., Houston, agreed to form a 50-50 joint venture to develop a natural gas liquids transportation and distribution system. It's anticipated the system will be capable of distributing product from key NGL sources in South Louisiana with direct connections to major NGL markets, including Louisiana river markets, as well as Lake Charles, La., and Mont Belvieu. The JV will be set up as a limited liability company.
Marketing
Texaco Inc. signed an agreement to acquire Amoco Poland Petroleum Products Sp.zo.o, making Texaco one of the largest western retail fuel operators in Poland. Agreement is subject to Polish government approval. Terms call for Texaco to acquire 12 service stations and 33 sites suitable for development, including convenience stores.
Pipelines
Saboteurs deliberately spilled an estimated 2,000 bbl from an oil pipeline operated by Royal Dutch/Shell's Nigerian unit in Nigeria's Bayelsa state, claimed Shell Petroleum Development Co. of Nigeria. Shell said a protective cage was cut open on a pipeline manifold at Isampou, and saboteurs opened a valve to release the oil. So far this year, more than 36,500 bbl have been lost in 41 incidents, Shell said.
Canada's National Energy Board began hearings on a bid by IPL Energy Inc., Calgary, to reverse a crude oil pipeline from Sarnia, Ont., to Montreal (OGJ, June 16, 1997, p. 34). IPL's 516-mile Line 9, with capacity of as much as 300,000 b/d, would serve refineries in Ontario if the project is approved. Only part of the line is in service. IPL wants to begin shipping 160,000 b/d in July 1998 and reach 240,000 b/d in the second year of operation.
Tennessee Gas Pipeline Co., a unit of El Paso Energy Corp., disclosed initial plans for its Eastern Express Project 2000, an extension of the Eastern Express project (OGJ, Apr. 14, 1997, p. 28). Officials said 400-500 MMcfd of incremental supplies are needed, as well as an increase in capacity to serve the New York City area. Additional details have yet to be disclosed; estimated costs will be made available to potential shippers prior to start of an open season.
Northern Natural Gas Co., a unit of Enron Corp., disclosed its East Leg 2000 open season resulted in requests totaling more than 650 MMcfd, exceeding the target volume of 450 MMcfd. More than 20 potential shippers made requests. Northern now will begin final negotiations for precedent agreements. The project will involve construction of a branch line, border station infrastructure, and mainline loop. The project is to be operational by Nov. 1, 1999, to move gas from Canada to Iowa, Illinois, and Wisconsin.
KN Wattenberg Transmission LLC, a unit of KN Energy Inc., Lakewood, Colo., plans a natural gas pipeline serving customers in the Denver metropolitan area along Colorado's Front Range. The proposed 100-mile pipeline would extend from the Rockport hub, south of Cheyenne, Wyo., to just north of Denver International Airport. The 250-MMcfd capacity line is expected to be in service for the 1998-99 heating season. An open season runs through August.
Florida Gas Transmission Co. (FGT), Houston, jointly owned by Enron Corp. and Sonat Inc., is conducting a system open season through Sept. 15 for potential shippers seeking incremental firm transportation service under FGT's FTS-2 rate schedule and for shippers that will permanently release firm capacity. The estimated initial in-service date for planned expansion work is late in 1999 or early in 2000.
Environment
U.S. Environmental Protection Agency issued proposed rules for the U.S. national low-emission vehicle program covering issues not included in the framework rule published June 6, as well as when EPA will set the structure for a nationwide voluntary program for new cars and light trucks. Goal is an emissions level that is 70% lower than current levels. EPA proposes that the program start in 1999 in northeastern states and in 2001 across the U.S.
Gas distribution
Distribuidora de Gas Natural de Mexicai SRL de CV (DGN) started natural gas delivery to Mexicali, Baja California. The project was Mexico's first natural gas privatization license (OGJ, Sept. 9, 1996, Newsletter). DGN will invest $25 million in the system during the first 5 years of its 30-year license. Also known as Ecogas, DGN partners are Enova International, San Diego; Pacific Enterprises International, Los Angeles; and Mexico's Proxima Gas SA de CV.
Terminals
Sullom Voe terminal, which handles crude oil and processes gas output that comes ashore via pipelines from U.K North Sea fields northeast of Scotland, marked the 6 billionth bbl of oil moved through the terminal. Operated by BP Exploration, Sullom Voe handles an average of 780,000 b/d, but officials want to boost throughput capacity to 1 million b/d in the next century. Sullom Voe received its first oil in November 1978. Today, it's used by 29 companies.
Copyright 1997 Oil & Gas Journal. All Rights Reserved.
