INDUSTRY BRIEFS

Refining

Iran and Pakistan moved a step closer to building a 120,000 b/d refinery at Khalifa Point near Karachi in Pakistan's Balochistan province (OGJ, Aug. 26, Newsletter). Pakistan's Karachi Stock Exchange issued a certificate allowing the Iran-Pak refinery to begin business as a limited public company. Other recent milestones include government allocation of 2,000 acres of land for the refinery site and completion of a feasibility study by ABB Lummus.

Japan's Toyo Engineering terminated a contract with John Holland Construction Group for work on the $50 million (Australian) catalytic cracker unit at Mobil's Altona refinery near Melbourne. Work was to be completed last month but is running about 9 months behind schedule. The project is part of an overall $250 million investment to enable the refinery to process a wide variety of crudes, prompted by decline of Bass Strait supplies.

Alternate fuels

Commercial Alcohol Inc., Brampton, Ont., let contract to Fluor Daniel Canada Inc., Calgary, for design and construction of a $153 million (Canadian), 150 million l./year ethanol plant at Chatham, Ont. Plant will produce fuel ethanol, industrial alcohols, carbon dioxide, and distillers' dried grains. Construction is slated for completion early in 1998.

Companies

Northwest Natural Gas Co., Portland, is an intervenor in the planned merger of Enron Corp. and Portland General Corp., not Northern Natural Gas Co., as reported incorrectly (OGJ, Dec. 9, Newsletter).

Repsol SA agreed to acquire Norsk Hydro AS' 63.64% operating interest in the Ras Kanayes and Ras El Hekma concession areas in Egypt's western desert. The deal is subject to consent of Kuwait's Kufpec, which holds the remaining 36.36% interest in the concessions, as well as approval of Egyptian General Petroleum Corp. and Egypt's government.

Saudi Aramco is considering buying a 35% stake in Petrogal, the Portuguese state oil company, said Portugal's secretary of state for industry and energy. Aramco signed a non-binding agreement to study the acquisition in July, and negotiations could conclude by yearend, the official said. The Portuguese government currently holds 55% of Petrogal while private shareholders hold the remaining 45%.

Russia's Gazprom let contracts totaling $130 million to units of Dresser-Rand Co. for gas reinjection, pipeline reconstruction, and other projects. Under one, Dresser-Rand will supply a high-pressure compression station for a $90 million gas lift project to extend the life of the Evo Yakha fields in western Siberia (OGJ, July 29, p. 52). Contracts totaling $40 million also were awarded to Dresser's Bredero Price division for recoating work on Gazprom's pipeline system rehabilitation project and to divisions Sperry Sun, Baroid Drilling Fluids, and Security DBS for directional drilling services, environmental fluids handling systems, and drill bits, respectively.

Exploration

Amoco Egypt Ras el Barr BV reports the fourth consecutive gas discovery on the Ras el Barr offshore concession in the Nile Delta. The 1 Osiris East flowed on test 35 MMcfd of gas and 2,275 b/d of condensate. Well was drilled 30 miles offshore in 287 ft of water and tested in Miocene sands below 13,280 ft. Find marks Amoco Egypt's 12th consecutive discovery in the Nile Delta in partnership with Agip SpA (OGJ, Aug. 26, p. 61).

Denmark and Greenland awarded an 8-year license for exploration and development off Greenland to a group of Norway's Den norske stats oljeselskap AS and Phillips Petroleum Co. 38.25% each, Danish-Greenland group Nunaoil AS 15%, and Denmark's Dansk Olie og Gasproduktion AS 8.5%. The license marks the first off Greenland since 1976.

Amoco (U.K.) Exploration Co. disclosed a U.K. North Sea oil discovery less than 2 miles from its Arbroath platform. The Block 22/18-6 new pool wildcat flowed 3,500 b/d of 42° gravity oil and 10.5 MMcfd of gas. Amoco plans to develop the find as a subsea tieback to Arbroath or nearby Montrose platform. Amoco aims to submit a development plan to U.K. Department of Trade & Industry in second half 1997 with a view to producing first oil in 1998.

Gas processing

Amoco Corp. will build an $80 million, 400 MMcfd capacity cryogenic gas processing plant in Southwest Kansas, near Williams Natural Gas Co.'s Hugoton station in Grant County. The plant will have helium and nitrogen recovery capabilities and is to start up in first quarter 1998. Plant will reduce nitrogen content to 3% vs. 14-17% common in Kansas gas and recover about 98% of helium, 80% of ethane, and virtually all heavier fractions.

Drilling-production

International Petroleum Corp. (IPC), Vancouver, B.C., let a 28-month time-charter contract valued at $55.4 million to Bumi Armada Navigation Sdn. Bhd., Malaysia, and its partner, Care Offshore Production System, Geneva, for a floating production, storage, and offloading (FPSO) system for phase one production from Bunga Kekwa field on Block PM3 off Malaysia. The 60,000 dwt FPSO Red Teal will mobilize early in 1997 for retrofitting prior to a planned June 1997 installation and July 1997 production start. Block PM3 interests are held by Petronas Carigali 46.06%, operator IPC 26.44%, Sands Petroleum AB 15%, and Petrovietnam Exploration & Production 12.55%.

IPC let a $4.2 million contract for engineering, procurement, and construction to Sime Sembawang Engineering Sdn. Bhd. (SSE), Malaysia, for design and fabrication of the Bunga Kekwa A six-slot wellhead platform to be built at its Pasir Gudang yard at Johor Baru, Malaysia. Platform design is based on a Ranhill Worley (Australia) design and consists of a 220-ton topsides on a three-pile, 396-ton braced monopod substructure. SSE awarded conceptual and detailed design to Ranhill Worley, Malaysia. Topsides, normally unmanned, will consist of a well control panel for 12 completions, production manifold, test separator, crane, chemical injection skid, boat landing, and helideck.

Oklahoma Corporation Commission raised the production allowable for the state's gas wells in first quarter 1997 to the highest level ever, reflecting strong demand and concern over storage levels below those for the last two heating seasons. The new per-well allowable will be 65% of calculated absolute open flow, or 1.3 MMcfd, whichever is higher. The limit has been the greater of 50% or 1 MMcfd since second quarter 1996 and applies to about 95% of Oklahoma wells not covered by output allocations for specific fields. However, the new allowable is expected to affect fewer than 1,000 of the state's 29,000 gas wells because of natural productive capacity limits.

Scimitar Hydrocarbons Corp., Calgary, signed a memorandum of understanding with General Petroleum Co. of Egypt to develop shallow heavy oil reserves in Issaran field about 140 km south of Suez in Egypt's eastern desert. Scimitar will start with a 6-month technical review, followed by a 3-year pilot calling for drilling, completion, and production testing of several wells together with steamflooding. The field contains an estimated 770 million bbl of original oil in place, of which about 17.7 million bbl is recoverable by horizontal drilling and 360 million bbl by steamflooding.

Total is negotiating a technical assistance contract with Kuwait, following the lead of British Petroleum Co. plc and Chevron Corp. Although Kuwait's hydrocarbon fields are still closed to equity investment by foreign companies, Total hopes the technical assistance option will open future opportunities. Total previously used this approach in Venezuela to pave the way for exploration and production rights.

Mobil Corp. reported year-to-date output of 518,000 b/d from its joint venture with Nigerian National Petroleum Corp., up from 450,000 b/d in 1995. Of the 1996 total, 100,000 b/d was condensate production. Mobil said the increase came mostly from offshore Ubit field, where output rose to 90,000 b/d from 30,000 b/d after expansion of platform capacity and reappraisal of the field. The JV hopes to reach 900,000 b/d output in 2000 through better technology and taking a new look at potential of its other fields.

Tankers

Pertamina let two time-charter agreements worth $57 million to Labroy Marine Ltd., Singapore. Labroy will build, then charter to Pertamina a 1,500 dwt products tanker and a 17,500 dwt products tanker for 10 years starting in 1998, with an option to extend the deal another 2 years.

Petrochemicals

Saudi Basic Industries Corp. (Sabic) unit Petrochemia will construct a $500 million styrene plant in Saudi Arabia. Plant will be jointly owned with Sadaf, another Sabic affiliate. New complex will increase Sabic's styrene production to 900,000 metric tons/year from 400,000 tons/year. Start-up is slated for 2000. Financing has not been arranged.

Huntsman Corp., Salt Lake City, plans to expand polystyrene capacity by 200 million lb/year by debottlenecking the Joliet, Ill., plant just purchased from Amoco Chemical Co. Huntsman closed the deal to acquire two Amoco polystyrene plants at Joliet and Willow Springs, Ill., with current combined capacity of 330 million lb/year (OGJ, Nov. 11, p. 46). The 200 million lb/year capacity expansion is slated to be on line by fourth quarter 1997 and will bring Huntsman's total U.S. polystyrene capacity to 1.7 million lb/year.

NOVA Corp., Calgary, claims its NOVA Chemicals unit has made a technical breakthrough improving its Sclairtech polyethylene technology the company said will cut production costs and improve plastics quality. NOVA acquired the Sclairtech process from Du Pont Canada. In a related move, NOVA plans to double capacity of its ethylene plant at Joffre, Alta., and Union Carbide will build an Alberta polyethylene plant to use 50% of the increased NOVA production.

SPR

U.S. Energy Department completed a congressionally mandated sale of $220 million worth of crude from the West Hackberry, La., Strategic Petroleum Reserve site. Congress ordered the sale to pay for SPR operations in fiscal 1997. During Oct. 24-Dec. 4, refiners bought 10,204,046 bbl of crude for $220,634,795. Weighted average price was $21.62/bbl. The sale reduced the SPR to 564 million bbl.

Pipelines

NOVA Corp. withdrew from the $700 million, 509-mile GasAtacama Argentina-Chile natural gas pipeline project. NOVA made the decision after a feasibility study showed the project would not provide a sufficient rate of return compared with other South American projects the company plans. NOVA is lead partner in the $900 million GasAndes pipeline under construction to Chile from Argentina. It is also considering a third pipeline from Argentina to southern Chile. Lead GasAtacama company CMS Energy Corp., Dearborn, Mich., signed a new joint venture partner, Empresa Nacional de Electricidad SA. The project includes a 400-MW power plant in northern Chile.

Suncor Inc., Calgary, plans to build a $250 million (Canadian) pipeline in Alberta from its oilsands plant near Fort McMurray to pipeline connections at Hardisty, 93 miles southeast of Edmonton. The 55,000 b/d line would open in 1998 to handle increased Suncor production. The company plans to hike output to 105,000 b/d by 1999 from a current 79,500 b/d. The 329-mile line would connect at Hardisty with existing crude oil lines to U.S. export markets and eastern Canada. Suncor will consider moving oil from other producers via the line and said it could be expanded to 140,000 b/d if required.

TransCanada PipeLines Ltd.'s Eastern Zone toll could drop to 69/Mcf from 71.4/Mcf, not from 86/Mcf as reported incorrectly (OGJ, Nov. 25, p. 36).

Power

Enron Corp., Houston, closed financing and resumed construction on Phase I of the 826-MW Dabhol combined cycle power plant in India, following dismissal of a lawsuit by the Bombay High Court (OGJ, Dec. 9, Newsletter). Phase I of the project is expected to cost $1 billion and be completed by late 1998. Plans for Phase II include expanding the plant's capacity to 2,450 MW and building a $560 million LNG plant. Enron holds an 80% interest in the venture, with units of Bechtel Group Inc. and General Electric Co. each holding 10%. U.S. and Indian lenders will finance about $646 million of Phase I, with remaining project costs to be funded through the partners' equity.

Export-imports

Canada's National Energy Board received five applications for export of 356 bcf of natural gas for 10-16 years. Filing for 10-year licenses to export to the U.S. Northeast were: Coastal Gas Marketing Co. 14 MMcfd, Enron Capital & Trade Resources Corp. 22 MMcfd, and PanEnergy Marketing Limited Partnership 8.7 MMcfd. United States Gypsum Co. also seeks a 10-year license to export 13.5 MMcfd for use at company plants in Minnesota, Michigan, Indiana, and Iowa. Progas Ltd. applied for three licenses for 10-16 years totaling 39.5 MMcfd to Minnesota and the U.S. Northeast. NEB interventions must be filed by Dec. 20.

A Kazakh oil delegation is expected to visit Iran this week to prepare for an exchange of oil between the two nations. Under an agreement signed last spring, Kazakhstan will deliver 14.6 million bbl of oil/year to Iran, and Iran will deliver the same amount to Kazakhstan. Deliveries will be expanded to 43.8 million bbl/year in the future. Kazakh oil will be refined at the Tehran and Tabriz refineries in Northwest Iran.

Copyright 1996 Oil & Gas Journal. All Rights Reserved.