INDUSTRY BRIEFS

Exploration

Texaco North American Production discovered natural gas in the Ouachita overthrust of Latimer County, Okla. The 22-1 Worrell well was drilled to 18,100 ft TD and completed with a calculated open flow potential of 25 MMcfd. Sales began May 14 at a rate of 7.5 MMcfd with flowing tubing pressure of 5,250 psi and have increased to 8.4 MMcfd. Operator and 50% interest holder Texaco is now evaluating other possible well locations in the area, where it has 8,000 net acres under lease. Other interests are Daesung Energy Resource Inc., Dallas, a unit of South Korea's Daesung Group, 32%, and Chesapeake Operating Inc., Oklahoma City, 14.6%; two individuals hold the remainder.

LNG

Malaysia's Petronas Carigali Sdn. Bhd. plans to buy four to six liquefied natural gas carriers. A final decision on the purchase of tankers and shipbuilding contractors will be made early next year. State-owned Petronas already has nine LNG tankers purchased from France's Chantiers de l'Atlantique shipyard. The company anticipates needing more tankers, particularly after the latest expansion of its LNG complex at Bintulu in 2001 (OGJ, Jan. 27, 1997, p. 30). The expansion will bring Malaysia's LNG capacity to about 23 million metric tons/year from 16 million tons/year now.

Abu Dhabi Gas

Liquefaction Co.commissioned its newest LNG tanker, completing renewal of its eight-vessel fleet. The tankers all ship LNG to Tokyo Electric Power Co., which has a 25-year agreement that took effect in 1994.

Drilling-production

Talisman Energy Inc., Calgary, won regulatory approval to develop its Ross oil and gas field in the U.K. North Sea. Talisman has a 52% interest in the field, which has estimated reserves of 60-100 million bbl of light crude and 20-30 bcf of natural gas. Partners are Lasmo Ltd., Clyde Expro plc, B.G. Great Britain Ltd., and Nippon Oil Exploration & Production Ltd. Talisman estimates pre-production costs at $300 million and plans 10 development wells. Plans also call for developing the field with a floating production/storage/offloading vessel with crude offloaded to shuttle tankers and gas exported to the Frigg trunk line. Output is slated to begin at around 40,000 b/d in third quarter 1998.

Phillips Petroleum Co. and partners on Block 15/11 in the South China Sea claimed a world record for extended-reach drilling with Xijiang 24-3-A14. The well's displacement was 26,446 ft from the Xijiang 24-3 platform, 80 miles south of Hong Kong. The well also set a China record for longest measured depth at 30,308 ft. The well tapped 14 oil-bearing sands with 246 ft of net pay and is now producing 4,200 b/d of oil. It is expected to yield 10,000 b/d at full production and will not be flow-tested.

Conoco Inc., Houston, let a 2-year contract to Producers Assistance Corp. (PAC) to provide screened and trained workers and certain equipment to operate the 1,100 gas wells in Texas' Lobo trend it acquired from TransTexas Transmission Corp. (OGJ, June 9, 1997, p. 25). PAC has already hired most of the available personnel from the previous operator.

Conoco (U.K.) Ltd. disclosed test results for an appraisal well in Buckland discovery on U.K. North Sea Block 9/18a. Borgsten Dolphin semisubmersible rig drilled the well to 12,109 ft total measured depth. The well flowed 4,265 b/d of oil and 4.4 MMcfd of gas from Beryl sandstones through a 40/64-in. choke.

Companies

Forcenergy Inc., Miami, signed a definitive agreement to purchase Edisto Resources Corp. and Convest Energy Corp., both of Houston, in a cash and stock transaction valued at $172 million. Edisto's primary assets are ownership of Convest and about $68 million in cash. Convest's holdings include 43 producing Gulf of Mexico blocks with an average working interest of 30% and interests in northern Utah's Bluebell/Altamont and Culp Draw fields. Forcenergy estimates that it will gain 6.344 million bbl of oil and condensate and 45.9 bcf in gas reserves from the deal.

Texaco Inc. combined its natural gas and alternate energy units into a single group, Texaco Global Gas & Power, to market the company's natural gas, natural gas liquids, electric power, and synthesis gas and manage project development. The company markets more than 3.3 bcfd of gas and 325,000 b/d of NGL and operates power plants producing more than 2,000 MW of electricity. Texaco is developing a 700-MW gas-fired power plant in Thailand and a 300-MW oil-fired cogeneration plant in the Philippines.

Union Texas Petroleum Holdings Inc. will invest $250 million during the next 3 years in Pakistan's oil and gas exploration, production, and marketing sectors. Projects under consideration include a 450-metric ton/day LPG plant, new oil and gas pipelines, and power plants.

National-Oilwell Inc., Houston, and Dreco Energy Services Ltd., Edmonton, expect their merger to close by Aug. 31 (OGJ, May 26, 1997, p. 30), following the end of an antitrust waiting period. National-Oilwell designs, builds and sells major mechanical components of oil and gas drilling rigs. Dreco designs and manufactures specialty drilling and well servicing equipment and downhole tools.

Broken Hill Pty. Ltd. (BHP) assigned its 43.75% stake in Viet Nam's offshore Dai Hung oil field to Malaysia's state-owned Petronas Carigali Sdn. Bhd. BHP initially had high hopes the field would be one of Asia's largest but was disappointed when reserves proved to be lower than initial estimates. Petronas will not pay for the interest but will assume BHP's financial responsibilities under the production-sharing agreement with the Vietnamese government, which has yet to approve the deal. BHP took a charge of $115.6 million against last year's earnings to write off its interest in the property.

Cogeneration

Enron International, a unit of Enron Corp., and Singapore Power International Pte Ltd. formed a joint venture, EnSing Power Pte Ltd., to develop and acquire small-scale power projects in China. The new company will focus on cogeneration projects of 50 MW or less throughout China.

BP Energy Ltd. won a $46 million contract from food producer H.J. Heinz Ltd. to design, build, and operate a combined heat and power plant at its Harlesden, U.K., plant. The contract calls for a 4.8-MW capacity plant to provide Heinz with electricity and steam for 11 years. The project is expected to reduce the site's energy costs by almost $800,000/year.

Gas distribution

Colombia's government awarded NorAm Energy Corp., Houston, and partners the right to build and operate natural gas distribution systems in four concessions in the states of Valle del Cauca, Quindio, Risaralda, and Caldas, west and southwest of Bogota. NorAm's partners include area coffee growers, existing gas distributors, and municipal water works. Construction is slated to begin in the fourth quarter. The system will serve as many as 400,000 customers within 5 years.

Refining

Bharat Oman Refinery Ltd. will build a 9,120 b/d Residuum Oil Supercritical Extraction (ROSE) unit for incorporation into a grassroots refinery under construction at Bina, India. M.W. Kellogg Technology Co. licenses the process for heavy-resid upgrading. It is the first ROSE license in India and will entail feeding ROSE-deasphalted oil to a lube hydrocracker for production of high-quality bright stocks. Koch Engineering Co., Wichita, will engineer and fabricate proprietary internal facilities utilizing the process.

Petrochemicals

Borealis AS, Copenhagen, will spend $210 million to increase ethylene capacity at its Stenungsund plant in Sweden to 610,000 metric tons/year from 400,000 tons/year. Work on the cracker will take place during a turnaround in fall 1999 for start-up in the fourth quarter that year.

Saudi Basic Industries Corp. let contracts to Technip Saudi Arabia and Kinetics Technology International BV, a unit of Mannesmann AG, Dusseldorf, for engineering, design, supply, and construction of the complete furnace section of a new ethylene unit at the Jubail complex operated by its Petrokemya subsidiary. The work, part of a previously disclosed expansion (OGJ, Mar. 31, 1997, p. 32), involves eight furnaces for the production of 800,000 metric tons/year of ethylene. The furnace section will fit into the basic package being developed by Stone & Webster Inc., Boston. Work is slated for completion early in 2000.

Pipelines

Pakistan and Turkmenistan nominated Unocal Corp. to lead a group planning a $2.5 billion, 1,403-km pipeline connecting the two countries via Af- ghanistan (OGJ, Jan. 20, 1997, Newsletter). The pipeline would transport as much as 2 bcfd of gas from Daulatabad field in southeastern Turkmenistan to Multan in central Pakistan, and share rights-of-way with an oil pipeline proposed by Unocal and Saudi Arabia's Delta Oil Co. A decision on the price of gas and other partners is expected soon, with formation of the group to be finished by fall for planned start of construction by yearend.

Norway's Den norske stats oljeselskap AS let a $140 million contract to the Paris-based McDermott-ETPM joint venture to lay a gas pipeline from Aasgard field off central Norway to Kaarstoe terminal. Work on the 690-km pipeline is slated to begin next spring for scheduled completion in fall 1999. The 20 billion cu m/year capacity pipeline will be installed by the LB 200 lay barge.

Columbia Gas Transmission Co. disclosed that the open season for its proposed Millennium gas pipeline project resulted in service requests for more than double the anticipated 650 MMcfd capacity (OGJ, Apr. 14, 1997, p. 29). Millennium remains on track to begin service by November 1999 and will seek permits from the Federal Energy Regulatory Commission later this year.

Gas processing

Mobil Oil Canada Ltd. started up a $10 million sulfur recovery plant at its Harmattan natural gas processing complex in central Alberta. A new system will increase sulfur recovery to 96.5% from 94.1% at the plant.

Energy marketing

MCN Energy Group Inc. and DTE Energy Co., both of Detroit, formed a joint venture to sell retail electricity, natural gas, and related services. The JV, DTE-CoEnergy LLC, will be owned 50-50 by DTE and MCN unit CoEnergy Trading Co. MCN is active in oil and gas exploration and distributes gas through its Michigan Consolidated Gas Co. unit. DTE Energy is the parent of Detroit Edison.

NGC Corp., Houston, and Nicor Inc., Naperville, Ill., formed a joint venture to offer a variety of energy services to customers in the U.S. Midwest. Initially, the new company, Nicor Energy LLC, will market energy primarily to industrial and commercial customers in Illinois, expanding offerings as deregulation of electricity proceeds in other markets. It marks the first of about a half dozen regional alliances that NGC hopes to form across the U.S. to gain a retail presence without merging with an electric concern (OGJ, Apr. 21, 1997, p. 21).

Gulf Canada Resources Ltd. and IPL Energy Inc., both of Calgary, formed a 50-50 joint venture that will be Canada's largest crude oil and liquids marketer, with initial volumes of 250,000 b/d. Gulf also created a joint gas marketing venture in early June with MCN Investment Corp., Detroit.

Avista Energy Inc., Spokane, Wash., a unit of Washington Water Power Co., formed a joint venture with Energy West Inc., Great Falls, Mont., to develop a retail market in Montana. The joint venture will provide energy marketing, risk management, technology assessment, energy information systems, and a variety of related services. Avista's move is part of an expansion that included forming a marketing alliance with a Chelan County Public Utility District in April and opening an energy trading office in Houston last month.

Spills

Exxon Corp. will appeal an Anchorage U.S. District Court judgment that calls for $5.06 billion in punitive damages for the 1989 Exxon Valdez tanker oil spill in Prince William Sound off Alaska (OGJ, Feb. 24, 1997, p. 45). The company will base its appeal on 11 substantive legal issues in five general areas, including alleged juror misconduct and excessive punitive damages. In its brief, Exxon notes that the judgment is 200 times greater than any ever upheld by an appeals court.

A U.S. District Court judge in Alexandria, Va., dismissed Colonial Pipeline Co.'s $31 million lawsuit against a construction company for allegedly causing a 400,000 gal diesel fuel spill on Mar. 28, 1993, that polluted 50 miles of the Potomac River. Colonial claimed the company damaged the 36-in. pipeline when it built a parking lot and detention pond in Reston, Va., in 1986, 7 years before the line ruptured. The judge ruled Colonial's evidence was too speculative to bring to trial.

Power

Ghana's electric utility, Volta River Authority, let a $55 million contract to Stone & Webster Inc., Boston, for engineering, procurement, and construction of the second phase of the 350-MW Takoradi gas-fired power plant. General Electric is providing key equipment for the plant. Work is slated to wrap up by September 1998. Stone & Webster also built the plant's first phase, a 200-MW unit slated to start operating in July. Phase 2 calls for converting the plant from simple-cycle to combined-cycle operation. Takoradi is the first gas-fired power plant in Ghana, which has traditionally relied on hydropower.

Copyright 1997 Oil & Gas Journal. All Rights Reserved.