INDUSTRY BRIEFS

Refining

Energy BioSystems Corp. (EBS), The Woodlands, Tex., commercializing biotechnology-based processes for petroleum refining and production industries, said its St. Louis pilot plant is processing a new supply of deeply desulfurized middle distillate provided by strategic ally Total Raffinage. EBS is incorporating latest developments for its biocatalytic desulfurization process, unit operations, and Total's feedstock into plant operations. It plans a wide range of simulations to establish a commercial unit for Total.

Japan Energy Corp. (JEC) plans to close down its Funakawa oil refinery in Akita Prefecture at the end of March. Its closure will be the first for Japan's refining industry, which is undergoing restructuring. Plant opened in 1939. Peak throughput of 20,000 b/d occurred in the 1950s, and current distillation capacity is 6,000 b/d. JEC said the plant has not been competitive since liberalization of gasoline imports in April 1996 (OGJ, May 6, 1996, p. 35).

Pipelines

Abu Dhabi National Oil Co. (Adnoc) is developing two major offshore fields to supply gas through a pipeline to Dubai, undercutting an offer by Iran. Adnoc will invest about $800 million to develop Umm Shaif and Abu al-Bukhush fields and link them to an onshore complex in Abu Dhabi's Jebel A* free zone. Project would provide the Al-Tawila gas plant with an additional 550 MMcfd of gas and involve construction of two new pipelines. One 115-mile pipeline would link Abu al-Bukhush to Al-Tawila; a 26-mile line would connect the gas plant to Umm Shaif. Adnoc will drill nine wells and build a gas processing plant at Al-Tawila. Contract will be let by yearend. Completion is set for second quarter 1999.

Companies

Triton Energy Ltd., Dallas, took a noncash, after-tax charge against fourth quarter 1996 results of about $38 million, representing all costs associated with its Argentine operation the past 12 years. Triton said its acreage portfolio, while commercially prospective, does not meet its primary objective of exploring for sizable reserves.

Associates First Capital Corp. (AFCC), Dallas, requested federal approval to acquire Texaco Inc.'s credit card services unit, including more than $700 million in receivables and 9 million accounts. Sale is to be completed in first quarter 1997. Subject to completion of agreements and regulatory approvals, AFCC will issue, process, and maintain Texaco's proprietary consumer and commercial credit cards. The Texaco/Saudi Aramco Star Enterprise joint venture will have a separate agreement.

Conoco (U.K.) Ltd. increased its interests in U.K. North Sea Vulcan and South Valiant gas fields by buying the interests of Marathon Oil U.K. Ltd. for an undisclosed sum. Addition of Marathon's 12.5% stake in each field takes operator Conoco's interest to 42.125% in Vulcan and 37.5% in South Valiant. Vulcan was developed with two unmanned platforms and South Valiant with one unmanned platform. Gas from the fields is brought to shore at the Conoco-operated Theddlethorpe gas terminal in Lincolnshire.

Oneok Resources Co., a unit of Oneok Inc., Tulsa, plans to acquire 100% of the stock of privately held PSEC Inc. (Potts Stephenson Exploration Co.), Oklahoma City, as well as PSPC Ltd., managing general partner and operator of Sycamore gas gathering system in Carter County, Okla. Value of the cash-stock deal is $20-30 million. Oneok plans development drilling on PSEC properties in Springer field in Carter County, Wellston field in Lincoln County, and Featherston field in Pittsburg County, Okla.

Drilling-production

Apache Corp., Houston, claims a record 8,430 ft TVD for a horizontal well drilled with coiled tubing. The 11-18 Harmattan, in Alberta's Harmattan field, penetrated a combined 1,200 ft of horizontal pay in the Elkton formation. Well flowed 5.2-6.4 MMcfd of gas during drilling, with reservoir pressure gauged at 1,750 psi. Apache plans to participate in four additional wells in the Harmattan field area in 1997. Apache used coiled tubing as a substitute for metal drill pipe sections, yielding faster drilling and cost savings in an underpressured field.

Saga Petroleum AS started oil production Jan. 29 from Vigdis field on Norwegian North Sea Block 34/7. Field was developed with 12 wells linked to three subsea templates and tied back to Snorre platform 7 km northeast. Vigdis, developed for $690 million, is expected to produce an average 100,000 b/d of oil. Oil is sent to Snorre for processing, then to Gullfaks A platform by pipeline for storage and shuttle tanker export (OGJ, Oct. 31, 1994, p. 20). With 180 million bbl estimated oil reserves, Vigdis is expected to produce 15 years.

Agip SpA drilled a successful appraisal of Cerro Falcone oil discovery on Volturino concession in Italy's southern Apennines region, reported 55% interest owner Enterprise Oil plc, London. Operator Agip holds 45% in the find. Agip produced 6,604 b/d of 32° gravity oil on test through a 11/4-in. choke. Well will be put on a long-term production test later this year prior to connection to Val d'Agri infrastructure. Produced oil will be taken to Agip's Taranto refinery by tanker truck. Next year, partners will complete a 145-km pipeline from Val d'Agri to the refinery, with capacity to export 150,000 b/d of oil.

U.S. Minerals Management Service seeks public comment on whether it should consider royalty relief for nonproducing leases in any water depth in the Gulf of Mexico. The 1995 Deep Water Royalty Relief Act authorized the government to cut royalties to increase production or encourage production of marginally economic oil and gas from producing or nonproducing areas.

MMS issued a final rule revising its requirements for preventing hydrogen sulfide releases from offshore platforms. Rule also sets requirements for detecting and monitoring hydrogen sulfide and sulfur dioxide releases and protecting personnel. MMS explained the revisions keep its rules aligned with current practices and technologies.

Norway's Den norske stats oljeselskap AS (Statoil) let a $23 million contract to Stolt Comex Seaway SA, Aberdeen, to lay flowlines in Aasgard and Gullfaks fields in the Norwegian Sea and Norwegian North Sea, respectively. Work will include installation of 130 km of control umbilicals and 135 km of service lines in water as deep as 350 m. The lines will be laid with Seaway Condor reelship, beginning in 1998 and continuing into 2000, with possible contract extensions.

Marathon Oil Co. plans to drill a third well early this year on its Ewing Bank discovery in the Gulf of Mexico off Louisiana after its 2 Ewing Bank 963 appraisal proved a commercial hydrocarbon deposit of about 30 million bbl of oil equivalent. Well, in 1,760 ft of water 8 miles south of Ewing Bank Block 873 platform, was drilled directionally to 15,600 TD and encountered oil pay below 14,500 ft. Operator Marathon expects a 20,000 b/d production rate when field begins output, expected in first quarter 1998.

Qatar's Idd al Shargi North Dome offshore oil field reached 80,000 b/d production on Jan. 15, the highest level in the last 2 years, reported Occidental Qatar Petroleum. Field output, 38,000 b/d in 1995, is expected to reach 100,000 b/d at peak in 2000 with enhanced recovery. Oxy signed a development/production-sharing agreement with Qatar in 1989.

Esso Norge AS let contract to UIE Scotland Ltd., Glasgow, for modifications to Balder field production vessel built by Smedvig AS, Stavanger. Esso bought the vessel to develop Balder on Norwegian North Sea Block 25/10. Vessel will enter drydock in March at Inchgreen, Port Glasgow, where UIE will increase oil processing capacity and number of risers. Some hull areas also will be strengthened to extend service life and allow attachment of riser stiffeners. Balder production is expected to peak at 75,000 b/d. Vessel will store as much as 380,000 bbl of oil for offloading by shuttle tankers (OGJ, Feb. 19, 1996, p. 58).

Gas processing

TransCanada PipeLines Ltd., Calgary, signed a $150 million definitive agreement with Enron Corp., Houston, to buy Enron's two gas liquids businesses. Deal, expected to close late last week, provides TransCanada all of the stock in Enron Louisiana Energy Co. Assets include four processing plants with total capacity of 2.1 bcfd, fractionation plants, connecting pipelines, more than 2 million bbl of liquids storage, and Enron's wholesale propane marketing business.

LNG

Japan's Chubu Electric Power Co. and four partners will pay an initial price of $4.10/MMBTU for liquefied natural gas from Qatar LNG Co. (Qatargas). Parties have yet to agree on a market price for 4 million metric tons/year of LNG Qatargas will supply Japanese power companies for 25 years (OGJ, Dec. 30, 1996, p. 28). Another seven Japanese power companies last month agreed to buy 2 million tons/year from Qatargas for 25 years.

Gas distribution

Enova Corp., San Diego, and Pacific Enterprises, Los Angeles, units, along with Mexican partner Proxima Gas, submitted a joint bid as Distribuidora de Gas Natural (DGN) to Mexico's Energy Regulatory Commission to build and operate a natural gas infrastructure system for the city of Chihuahua. Bids will be opened Mar. 6 and winning bids announced Mar. 20. Last year, DGN won the first natural gas privatization license granted by Mexico's government to build and operate a natural gas infrastructure system for Mexicali.

Exploration

Uganda awarded exploration rights to U.K.'s Heritage Oil and Gas Co. Ltd. covering oil prospects in the Semlike basin and southern Lake Albert region in western Uganda. The 4-year agreement comes in the wake of two aborted contracts Uganda signed with other foreign companies that did not meet obligations (OGJ, Nov. 1, 1993, Newsletter). Heritage made an irrevocable bank guarantee of $200 million to back its obligations under the deal.

Oman signed an exploration and production agreement with Saudi Nimr Petroleum Co. for Oman's Zone 3 concession. Contract requires Nimr to spend about $50.5 million on E&P the next 8 years.

Syrian Petroleum Co. and the Syrian government signed an exploration, development, and production license with Hungary's state oil company MOL. In 1997, MOL will start exploring an 1,850-sq mile block in Syria at Palmyra East, 30 miles northeast of Palmyra. Work calls for seismic surveys, including 80 sq miles of 3D, and deepening four wells. MOL will own 100% of the project and serve as operator.

Pennzoil Exploration & Production Co. found oil in the Gulf of Mexico with 1 Garden Banks 161 wildcat, reported Enterprise Oil plc, London. Enterprise said the well was drilled to 18,000 ft TD and cut more than 220 ft of pay in three intervals. The well has been suspended for future development.

Spills

Berry Petroleum Co., Taft, Calif., agreed to pay $3.2 million to settle with California and the U.S. government for civil damages and penalties arising from a December 1993 oil release at McGrath Lake in Ventura County, Calif. As part of the settlement, Berry admits no liability.

Alyeska Pipeline Service Co. reopened its ballast water treatment plant at the port of Valdez in Alaska. Plant was closed recently after an oil slick in the port was discovered. For several days, arriving tankers were required to retain their ballast water, and some had to leave port with partial crude cargoes.

Alternate fuels

Portugal's Valorisacao a Tratamento de Residuos Solidos de Area Metropolitana de Lisboa (Norte) SA, Lisbon, let contract to units of Foster Wheeler Corp., Clinton, N.J., to build one of the largest waste-to-energy plants in the world. Plant will have capacity to burn about 2,000 metric tons/day of municipal waste to support electric power capacity of 43.3 MW, with power to be sold to Electricidade de Portugal.

Terminals

TransMontaigne Transportation Services Inc., Fayetteville, Ark., acquired Mobil Oil Corp.'s East Chicago, Ind., products tank farm and storage complex with about 1.2 million bbl storage capacity. Company will open a new petroleum products truck terminal at South Bend, Ind., capable of loading 15,000 b/d and individual trucks in 6-14 min, depending on the product mix.

Exports-imports

Canada's Natural Energy Board will hold its next hearing on applications for gas export licenses in May 1997. Deadline is Feb. 20.

Environment

Natural Gas Supply Association intervened to support the U.S. Environmental Protection Agency's nitrogen oxide control program rule issued Dec. 19, 1996. Rule affirms use of natural gas reburn as a predominant technology for controlling nitrogen oxide from coal-burning cyclone and wet-bottom-wall-fired boilers. A number of utilities have filed suit challenging the rule.

Petrochemicals

Texas Petrochemicals Corp. (TPC), Houston, will increase capacity to produce 1,3 butadiene (BD), butane-1, and isobutylene. TPC will add 500 million lb/year BD capacity, up from current capacity of 840 million lb/year. Project, slated for completion in late 2001 or early 2002, is timed to take advantage of a projected 1-2% annual growth in U.S. BD demand.