Industry Briefs

NGL

Warren Petroleum Co. LP, Houston, will build a $57 million NGL fractionation plant near Lake Charles, La. Construction will begin next month, and completion is slated for third quarter 1998. The 55,000 b/d plant will process liquids from Gulf of Mexico gas production and produce ethane, propane, and a mixture of butane and natural gasoline. The plant will be connected to Warren's 300-mile NGL gathering system, to 11 underground storage facilities, and to Warren's 12-in., 80,000 b/d liquids pipeline to Mont Belvieu, Tex.

LNG

Osaka Gas Co. signed a 20-year contract to purchase 660,000 metric tons/year of liquefied natural gas from Oman Liquefied Natural Gas Co. beginning in 2000. Before the purchases begin, Osaka Gas will build a 137,000 cu m LNG tanker. Oman is building a $5 billion, 6.6 million ton/year LNG facility 170 km south of Muscat. Oman signed a long-term deal last October to supply 4 million tons/year of LNG to South Korea.

Spills

The U.S. Coast Guard (USCG), the California Department of Fish and Game, and Nuevo Energy Co. are containing a 200-500 bbl oil spill from a subsea pipeline off Point Arguello, Calif. Nuevo affiliate and pipeline operator Torch Operating Co. shut down the line when pressure loss was detected. On Oct. 1, cleanup officials said the spill would be fully contained within 48 hr. As of Sept. 30, 75 bbl of oil had been recovered, and 50-70 bbl had been corralled in two retention booms and were being skimmed into holding tanks. At presstime, 11 oiled birds had been captured and one had died. USCG said the spill is not a major threat to the coastline.

The U.S. Justice Department
said parties responsible for an 826,000-gal heating oil spill off Rhode Island in January 1996 have admitted criminal liability and agreed to pay $8.5 million in fines and conservation payments, plus $1 million on remedial safety programs. Elkof Marine Corp., Thor Towing Corp., and Odin Marine Corp. still face civil liabilities for the spill by the barge North Cape.

Drilling-production

A blowout on a service rig in Rainbow Lake field in northwestern Alberta was still spewing water and sour gas at presstime. Mobil Oil Canada says the releases are being dissipated by moderate winds and light precipitation and do not pose immediate health threats. The Alberta Energy and Utilities Board is on the scene. Air and groundwater emissions are being monitored. With the help of a specialist from Safety Boss, Mobil is making progress toward controlling the blowout, which occurred Sept. 25, and plans to plug the well. The area was evacuated, and no injuries were reported.

Saga Petroleum AS
will develop its Kristin and Lavrans gas and condensate finds in the Norwegian Sea with a shared tension leg platform (TLP). Saga chose a TLP over a floating production, storage, and offloading vessel after an overall study of economy, safety, resource utilization, operation, flexibility for tie-in of additional reserves, and schedule. The TLP will be in Kristin field, with a subsea development tied back from Lavrans. The TLP will carry gas injection facilities to maximize condensate recovery from Kristin. Lavrans will be produced by pressure depletion.

Cairn Energy plc,
Edinburgh, disclosed test results of an appraisal well on its Block 16 Sangu find off Bangladesh. The Sangu-3z well penetrated a shallow gas-bearing zone. A 5 m section of 40 m of sandstone was tested under equipment constraints. The well, designated as a producer as the field is being developed, flowed 45 MMcfd of gas through an 80/64-in. choke with 1,300 psi flowing wellhead pressure. Cairn is developing Sangu under an alliance with Halliburton Co. and state firm Petrobangla (OGJ, Aug. 5, 1996, p. 21).

Norsk Hydro AS
started oil production from Njord field on Blocks 6407/7 and 6407/10 in the Norwegian Sea. Njord was developed with a production semisubmersible and storage tanker for 5.4 billion kroner (OGJ, June 19, 1995, p. 25). Early output is through a predrilled production well and a gas injector. Thirteen additional wells will be drilled from the platform. Plateau oil production of 70,000 b/d is anticipated next spring. Estimated reserves are 200 million bbl of oil and 210-350 bcf of gas.

Nigeria's Department of Petroleum Resources
says 13.366 billion cu m of gas-72.5% of total production-was flared in the country in first half 1997, with the rest reinjected or used in power generation or processing. The department says the increase from the previous year is due to greater crude and gas production. Gas flaring is expected to decline as gas utilization projects take off. In February, for example, the Lagos Industrial Gas project will begin using 50 million cu m/day of gas from the Niger delta.

Chevron Nigeria Ltd.
began selling 20 MMscfd of treated gas to Nigerian Gas Co. from its recently completed Escravos gas project. Chevron will begin exporting Escravos LPG this week, as soon as inventories in its floating storage and offloading (FSO) vessel are adequate. Under the Escravos project, associated gas from Chevron's Okan and Mefa fields is piped to an onshore liquids extraction plant, which removes LPG and heavy liquids. The LPG is piped offshore to a 54,000 cu m (340,000 bbl) FSO. The heavy liquids are blended into Escravos crude for export.

Futures

London's International Petroleum Exchange reports growing trading volumes for its natural gas futures contracts. A record 1,595 contracts changed hands on Sept. 23, representing an amount equal to more than two thirds of U.K. natural gas production. The contracts were launched on Jan. 31. Four companies recently joined IPE with a view to hedging their gas transactions: Alliance Gas Ltd., BP Gas, Enron Europe Ltd., and Westminster Clearing Ltd.

Gas processing

Coastal Field Services Co., a unit of Coastal Corp., Houston, will expand its Pelican gas processing plant near Patterson, La., to 325 MMcfd from 235 MMcfd. Modifications will be done in stages, with completion scheduled for mid-1998. The plant, now operating at full capacity, processes gas from producers in the western Gulf of Mexico.

Companies

Ultramar Diamond Shamrock Corp. (UDS) completed acquisition of Total Petroleum (North America) Ltd. (OGJ, Apr. 21, 1997, p. 26). UDS issued 0.322 shares of its common stock for each of Total Petroleum's 39 million outstanding shares and assumed about $435 million in debt.

General Electric Co.
unit GE Power Systems will buy Stewart & Stevenson's gas turbine division for $600 million in cash. Stewart & Stevenson will concentrate on its more successful growth businesses, including oil field equipment. GE says the acquisition will give it new market reach in the petroleum industry.

United Meridian Corp. (UMC),
Dallas, approved a 1997 capital spending increase to $359 million from $250 million. Of the total budget, $116 million is tagged for exploration, 57% of which will be spent outside the U.S. UMC allocated $186 million for field development and $57 million for property acquisition. UMC's aggressive seismic data acquisition program for defining 1998 drilling includes acquiring 4,200 sq km of 3D data and 2,100 line-km of 2D data in Equatorial Guinea. UMC has more than doubled development drilling vs. 1996.

Witco Corp.
and Exxon Co. USA have terminated joint venture discussions after 9 months of study. The two were considering forming a company to manufacture and market white oils and related products in North America. Their decision resulted from higher than expected capital investments required to transfer major equipment from Witco's plant at Petrolia, Pa., to Exxon's Baytown, Tex., refinery.

Talisman Energy Inc.,
Calgary, will acquire from Loram Corp., Calgary, all of the issued and outstanding shares of Pembina Resources Ltd., Calgary, for $501 million (Canadian). Pembina Resources owns all of the oil and gas assets of Pembina Corp. Talisman will assume about $104 million in long-term debt and has a bridge loan in place to finance the acquisition. Pembina's current production is about 10,000 b/d of liquids and 92 MMcfd of gas. The purchase will lighten the gravity of Talisman's average crude barrel in Canada.

Cogeneration

San Pascual Cogeneration Co.International BV (SPC) signed an agreement with Philippine electric utility National Power Corp. to supply electric power from a 304-MW cogeneration plant SPC is building at Batangas on the Philippines' Luzon island. The plant also will supply steam to Caltex (Philippines) Inc.'s adjacent 74,000 b/d refinery and to a nearby chemical plant. Start-up is scheduled for 2001. Estimated construction cost is $400 million. San Pascual Cogeneration is owned equally by Texaco Inc. and Edison Mission Energy, Irvine, Calif.

Exploration

Repsol SA's Boquerón-1 exploratory well off Spain's Tarragona coast flowed on test at a rate of 10,000 b/d of 38° gravity oil. The extended-reach well was drilled at angles as great as 60° to a true vertical depth of 4,653 m and was completed 3 km north of the Casablanca platform. The find is a satellite to Casablanca field and will be put into production immediately. The crude will be processed on the Casablanca platform and piped to Repsol's Tarragona refinery via an existing 50-km., 12-in. subsea line.

The Danish Energy Agency
confirmed dates for the country's fifth offshore licensing round, first announced last year (OGJ, Nov. 18, 1996, p. 29). The round will include all unlicensed acreage in the Danish North Sea west of 6°15' East. Applications for acreage must be submitted by Jan. 27. Awards will be announced early next summer.

Union Pacific Resources Group Inc.,
Fort Worth, cut 300 ft of oil pay in three zones with its Mississippi Canyon 755 No. 2 exploratory well on the Gomez prospect in the Gulf of Mexico. The well was drilled to 17.707 ft TD in 3,000 ft of water. Estimated reserves are 20-25 million bbl of oil. UPR postulates probable reserves for Gomez and adjacent blocks at 100-140 million bbl of oil. First production is scheduled for second quarter 2000.

Petrochemicals

A joint venture of BASF Corp., Mount Olive, N.J., and Fina Inc., Dallas, let a turnkey contract to ABB Lummus Global, Zurich, for detailed engineering and process licensing for a planned liquids cracker (OGJ, Sept. 29, 1997, Newsletter). The Port Arthur, Tex., plant will use ABB Lummus Ethylene 2000 technology. Estimated capital cost is about $800 million. Start-up is scheduled for fourth quarter 2000.

Sabic Marketing Ltd.,
the global marketing unit of Saudi Basic Industries Corp. (Sabic), renewed a 12-month contract to supply a total of 120,000 metric tons (1.019 million bbl) of methyl tertiary butyl ether (MTBE) to Pakistan. Sabic first sold MTBE to Pakistan in 1994. Sabic increased MTBE capacity to 62,800 b/d from 46,520 b/d this year.

Refining

Star Enterprise's Delaware City, Del., refinery will receive a single-train air separation plant from Praxair Inc., Danbury, Conn. Praxair sold the plant to Parsons Process Group Inc.-contractor for a coke gasification unit being built at the refinery (OGJ, Sept. 22, 1997, p. 42). The air separation plant will produce more than 2,800 tons/day of oxygen and 8,000 tons/day of nitrogen beginning in July 1999. Under a separate agreement, Praxair retains rights to as much as 500 tons/day of liquid oxygen, nitrogen, and argon for delivery to its area customers.

Two German refineries,
Raffineriegesellschaft Vohburg/Ingolstadt mbH (RVI) and Erdöl Raffinerie Neustadt GmbH (ERN), are forming a single, interconnected facility under a new company, Erdölraffineriegesellschaft Vohburg/Ingolstadt/Neustadt GmbH (Ervin). RVI is owned by Deutsche BP Holding AG 62.5% and Agip Deutschland AG 37.5%. ERN is owned 50-50 by Mobil Mineralöl GmbH and Ruhr Oel GmbH (a venture of Veba Oel GmbH and Petroleos de Venezuela SA). European overcapacity and investment to meet new fuel specs spurred the move. There will be "no significant impact" on overall staff numbers, say partners BP 30%, Mobil and Ruhr 25% each, and Agip 20%.

Pipelines

A combine of Australian Gas Light, Sydney, and CMS Energy, Dearborn, Mich., is one of a reported 44 groups bidding to buy the Dampier-Bunbury gas pipeline, valued at $1 billion (Australian). The line is being expanded to 476 MMcfd from 443 MMcfd. The additional capacity is already committed. The sale is scheduled to close by yearend.

TransCanada PipeLines Ltd.,
Calgary, filed a preliminary submission with Canada's National Energy Board to begin determining the scope of environmental assessment for proposed expansions in Ontario. One project involves building a 24-km, 36-in. line alongside TransCanada's Dawn extension. The line will connect with the proposed Vector line (OGJ, Aug. 25, 1997, p. 29). The second project involves building a 135-km line across Lake Erie from near Port Stanley, Ont., to North East, Pa. About 90 km of new rights-of-way will lie in Canadian waters. The two projects will be connected by an 85-km line to be built by St. Clair Pipelines Ltd., a subsidiary of Westcoast Energy, Vancouver, B.C.

The U.S. Federal Energy Regulatory Commission
ruled Williams Cos. must refund $15 million to customers for "take-or-pay" costs. A predecessor to its Williams Natural Gas Co. unit incurred the costs to buy out three contracts to purchase gas from Yuma County, Colo., producers in 1982. Williams said it would ask FERC for a rehearing and appeal to federal court if necessary.

Copyright 1997 Oil & Gas Journal. All Rights Reserved.