INDUSTRY BRIEFS

Power

Tri Energy Ltd. secured $400 million in financing to construct a 700-MW natural gas-fired power plant in Thailand's Ratchaburi province. The firm is a joint venture of Texaco Inc. and Banpu Public Co. Ltd. 37.5% each and Southern California Edison affiliate Mission Energy 25%. The plant is scheduled to start up in mid-2000. Tri Energy will sell electricity to Electricity Generating Authority of Thailand under a 20-year agreement. A group of nine international banks provided nonrecourse project financing, supported by U.S. Overseas Private Investment Corp. and Japan's Ministry of International Trade and Industry.

Lubes

Alexandria Mineral Oils Co. (AMOC) let a $200 million contract to Foster Wheeler France SA, Paris, to construct a lube oil plant at Alexandria, Egypt. AMOC is a new Egyptian private joint venture led by Alexandria Petroleum Co. (APC). The plant will be built next to APC's 95,000 b/d refinery. Foster Wheeler is responsible for detailed engineering, procurement, construction, precommissioning, commissioning, and start-up of the plant, designed to produce 110,000 metric tons/year of specialty and neutral lube oils and 27,000 metric tons/year of food-grade hard waxes. Work is expected to be completed late in 2000.

Petrochemicals

Formosa Plastics Corp. licensed Phillips Petroleum Co.'s loop slurry polyethylene technology for its Point Comfort, Tex., plant. Formosa will build a new single-train 250,000 metric ton/year unit, which initially will produce medium and high-density polyethylene resins. Start-up is expected early in 2001.

Shell Chemicals Canada Ltd.
began construction of a $375 million (Canadian) ethylene glycol plant at Scotford, Alta. (OGJ, Feb. 24, 1997, p. 40). Fluor Daniel Canada Inc., Calgary, is primary contractor. The 400,000 metric ton/year plant is scheduled to start up in July 2000.

Saudi European Petrochemical Co.
(Ibn Zahr) let an engineering, procurement, and construction management contract to a unit of Parsons Corp. for expansion of its polypropylene plant at Al-Jubail, Saudi Arabia. The new train will double the plant's capacity to 640,000 metric tons/year. It will use Union Carbide Corp.'s Unipol technology. Start-up is slated for mid-2000. Ibn Zahr is owned by Saudi Basic Industries Corp. 70%; and Finland's Neste Oy, Italy's Ecofuel SpA, and Japan's Arab Petroleum Investment Corp. 10% each.

NGL

Petroleos de Venezuela SA let a $450 million contract to a consortium of TransCanada PipeLines Ltd., Enron Corp., and Technoconsult SA, to build, own, and operate two natural gas liquids extraction facilities, called Accro III and IV. Included are NGL extraction facilities in San Joaquin and Santa Barbara, Venezuela, and NGL fractionation, storage, and refrigeration facilities in Jose, Venezuela. The units will process 800 MMcfd of gas and fractionate 50,000 b/d of NGL; products are allocated for export. Construction is expected to begin early in 1999.

Exports-imports

Canada's National Energy Board (NEB) approved an application by Renaissance Energy Ltd., Calgary, to export 8.5 bcf/year of natural gas for 10 years beginning Nov. 1. Renaissance will deliver gas from Niagara Falls, Ont., to its U.S.-affiliate, Renaissance Energy Inc., to supply existing and new markets in the U.S. Northeast and Mid-Atlantic regions. The gas will come from Renaissance's Alberta supply pool.

NEB
approved TransCanada Gas Services Ltd.'s (TCGS) application to export 11 bcf/year of natural gas for 10 years beginning Nov. 1. TCGS will deliver natural gas from East Hereford, Que., to its U.S. affiliate Trans- Canada Gas Services Inc. to supply New England markets. The gas will be purchased from Signalta Resources Ltd., Calgary.

Drilling-production

Bayard Drilling Technologies Inc., Oklahoma City, agreed to purchase the contract drilling assets of TransTexas Gas Corp., Houston, for $75 million. Included are 25 rigs, related equipment, and a drilling support facility in Laredo, Tex. All of the acquired rigs are capable of drilling to depths of 12,000 ft or greater; 12 are capable of drilling to 20,000 ft. Bayard also will enter into a 21/2-year drilling alliance with TransTexas that allows Bayard first right to provide TransTexas as many as 15 rigs for land drilling in South Texas and the Gulf Coast. Bayard plans to offer positions to most of TransTexas' 200 drilling operations employees.

Norway's Statoil
let contract to Stena Drilling Ltd., Aberdeen, for the Stena Don semisubmersible drilling rig to be constructed at the Kvaerner Warnow yard near Rostock, Germany. The semisubmersible will cost $330 million to construct and outfit and will be capable of operating in up to 500 m of water. The contract will have a 5-year minimum term and is valued at 2.5 billion kroner. Delivery is scheduled for spring of 2001.

Profco Resources Ltd.,
Calgary, started construction of a production platform for Ejulebe field off Nigeria. The platform is expected to arrive in Nigeria in late August. Following pipeline construction, the platform will be tied into four oil wells and one gas injection well; production is expected to begin late in September. On test, the four wells flowed a combined 21,000 b/d of oil. Profco's share of production is 60% before recovery of all costs and 22.5% thereafter.

Esso Production Malaysia Inc.
began production from Raya A oil platform, 165 miles off Terengganu, peninsular Malaysia. Seven wells are expected to be drilled from Raya A, with peak production of 24,000 b/d of oil anticipated in 1999. The first well was brought on stream in early June, marking first oil from the PM8 area (OGJ, July 21, 1997, p. 34). Raya A production is transported via a 16-in. pipeline to the Seligi A platform, where oil and gas will be comingled with Seligi production and sent to the Tapis gathering system.

Cogeneration

Houston Industries Power Generation Inc. and Wood River Refining Co. (WRRC), a joint venture of Shell Oil Products Inc. and Texaco Inc., agreed to develop a 634-MW natural gas-fired cogeneration plant at WRRC's 275,000 b/d Roxana, Ill., refinery. The project will provide steam to the refinery and sell electricity through Houston Industries' energy marketing and trading division, NorAm Energy Services (NES). NES will supply the gas feed and make a portion of the electricity available for sale to WRRC.

Companies

Key Energy Group Inc., East Brunswick, N.J., offered to acquire Dawson Production Services Inc., San Antonio, in a cash deal valued at $180 million. Key plans to purchase all of Dawson's outstanding common stock for $16/share. Key says the price represents a premium of 62% over the closing price of Dawson's shares on June 12, 1998, the last trading day before Key disclosed its present investment of 820,500 shares of Dawson common stock.

Husky Oil Ltd.,
Calgary, agreed to purchase properties off eastern Canada from Talisman Energy Inc. and Gulf Canada Resources Ltd., both of Calgary. The deal involves 12 significant discovery areas covering about 55,000 acres in the Jeanne d'Arc basin. Included are interests in White Rose, Terra Nova, North Ben Nevis, Nautilus, and Mara fields. Talisman will receive $50 million (Canadian) for its acreage, and Gulf $20.66 million.

Exploration

Yemen's government awarded a production-sharing agreement for Block S-1, which covers 4,500 sq km next to Yemen's Marib al Jawf basin, to TransGlobe Energy Corp., Calgary. The 30-month agreement requires TransGlobe to acquire 150 sq km of 3D seismic and drill three exploration wells at an estimated cost of $11 million. TransGlobe has an option for an additional 30-month period to conduct another 100 sq km 3D seismic survey and spud another three wells. Vintage Petroleum Inc., Tulsa, plans a farmout on TransGlobe's acreage. Yemen's Ministry of Oil and Natural Resources must approve the farmout, which would give Vintage 75% interest and Transglobe the remaining 25%. Vintage's stake would cost about $20 million.

State-owned Empresa Nacional de Hidrocarbonetos de Mocambique
(ENH) signed two additional production-sharing agreements (PSA) with Sasol Petroleum International (Pty.) Ltd., ARCO Mozambique (Temane) Ltd., and Zarara Petroleum Resources for Sofala and M10 exploration permits off Mozambique (OGJ, Sept. 8, 1997, p. 34). Operator ARCO Mozambique, Sasol, and Zarara have interests of 47.62%, 47.62%, and 4.76%, respectively, in the Sofala and M10 blocks. Under the PSA, the partners have 7 years to conduct seismic surveys in the two permit areas and drill five wells on Sofala block and four wells on M10 block. The group plans to invest $30 million in the two blocks. A wildcat is planned on Sofala early in 1999.

Amoco Corp.'s
1 J.W. Vanderbeek discovery well in the Cotton Valley reef trend north of Houston flowed on test at a rate of 29.3 MMcfd with flowing tubing pressure of 8,744 psi through a 22/64-in. choke. The well was drilled to 17,500 ft TD. Amoco plans to bring the well on line in August. The well's flow rate is temporarily restricted due to temperature specifications of the pipeline it will be tied into. Operator Amoco 55% said the well cut 370 ft of pay with an average porosity of 11% and maximum porosity of 22%. Remaining interests are held by Spirit Energy 76 and Kaiser-Francis Oil Co.

Mobil Exploration & Producing U.S. Inc.
started gas production from its Ponciano Ruiz No. 1 new pool discovery well in south Texas. The well, in Rich Hurt field in western Duval County, Tex., was drilled to 11,936 ft and is producing 17 MMcfd from Wilcox Hinnant. The field is the first discovery by a drilling alliance formed in January with J.M. Huber Corp., Houston, and Quisto Ventures LC, Sugar Land, Tex. The alliance controls more than 27,000 acres in the upper Wilcox trend. Interests are operator Mobil 45.375%, J.M. Huber 37.125%, and Quisto 17.5%.

Pipelines

Petroleo Brasileiro SA, Brazil's state-run oil company, extended its charter of Coflexip Stena Offshore Group's Sunrise 2000, a deepwater flexible pipelay vessel, for another 3 years. The charter extension is valued at $100 million. Under the previous vessel charter agreement between Petrobras and Coflexip Stena, the Sunrise 2000 was to be chartered through Mar. 6, 2000. The vessel will lay subsea flexible pipe in water depths to 2000 m. The tensioning capability of the Sunrise 2000 will be increased to satisfy deepwater requirements.

B.C. Gas Inc.,
Vancouver, B.C., will reapply to build a $350 million (Canadian) natural gas pipeline across southern British Columbia. The B.C. Utilities Commission denied the first application because of concerns that gas demand was not at a level to justify costs associated with the 194-mile line from Oliver to Yahk, B.C. The company surveyed potential users and claimed there is interest in transporting more than double the planned 105 MMcfd initial capacity of the proposed line.

Refining

Shell Oil Co. and Petroleos Mexicanos began preliminary design work to expand crude oil and delayed coker units at their Deer Park, Tex., refinery. The project would expand Maya crude oil processing by an additional 60,000 b/d. The refinery currently processes 280,000 b/d of oil, including 160,000 b/d of Maya crude. The project also includes expanding the coker, constructing a new sulfur plant, and upgrading crude distillation, distillates, hydrotreating, and hydrocracking units. The expansion is scheduled for completion in 2001. A more detailed engineering study is expected in early 1999.

India's parliament
is backing away from a proposed joint public-private sector refinery in northern India. State-owned Bharat Petroleum Corp. Ltd. (OGJ, Jan. 12, 1998, p. 31) and a private sector partner would have each held a 26% stake. The remaining shares in the refinery would have been offered on India's stock exchange. Previously, India's Planning Commission had raised objections to the size and cost of a proposed refinery in Punjab that would have been operated by Hindustan Petroleum Corp. Ltd.

Gas distribution

Mexico's Energy Regulatory Commission issued a natural gas transportation permit to Fraccionadora Industrial del Norte Energeticos (Finsa). Finsa is a unit of Grupo Arguelles and Grupo KeySpan, both owned by Brooklyn Union Gas Co. The permit authorizes Finsa to transport natural gas through an 8-km, 5.8 MMcfd pipeline system. Finsa plans to transport 1.7 MMcfd of gas from Pemex Gas y Petroquimica Basica's Rey- nosa-Matamoros pipeline to the Finsa industrial park in Matamoros, Tamaulipas. CRE authorized a $4.10/gigacalorie tariff.

Gas processing

Dynegy Canada Inc. (formerly NGC Canada Inc.), a unit of Dynegy Inc., will acquire Compton Petroleum Corp.'s midstream gas processing facilities in southern Alberta, including its 82 MMcfd sour gas plant at Mazeppa. Under the terms of the agreement, Dynegy Canada will acquire Compton's interests in the Mazeppa and Gladys gas plants, with combined capacity of 97 MMcfd, 50 km south of Calgary, together with 125 km of associated gathering pipelines. Compton is assured processing and transportation capacity, at set rates, and will receive $60 million (Canadian) on closing. In addition, under an incentive payment arrangement relating to a maximum of 50 new wells to be drilled in the Mazeppa/Nanton area, Compton will receive $12.5-25 million, depending on the productivity of the wells.

LNG

Qatar Liquefied Gas Co. (Qatargas) agreed to supply 180,000 metric tons of LNG to Spain's Enagas in three consecutive shipments beginning in December. The agreement gives Enagas the option to purchase another nine shipments in 1999. Qatargas let contract to Bonny Gas Transport Co. to transport the LNG.

Copyright 1998 Oil & Gas Journal. All Rights Reserved.