INDUSTRY BRIEFS

Alternate fuels

Kazakhstan's Parastatal Co. Batys let contract to France's Technip-Spiechim for a $20 million wheat to ethanol plant at Uralsk, Northwest Kazakhstan. Capacity of the plant, slated for start-up in 1998, is to be 100,000 l./day. In addition, Technip-Spiechim this year will start up an ethanol plant with the same capacity and cost at Kustanai, Kazakhstan, for the Kazakhstan Foreign Trade Association.

Refining

Valero Refining Co., San Antonio, let a long term contract to Air Liquide America Corp., Houston, to supply 15 MMscfd of high purity hydrogen to its Corpus Christi, Tex., refinery via a new Air Liquide pipeline to be completed by yearend 1996. The pipeline also will have capacity to supply additional hydrogen to other Corpus Christi area refineries.

Exploration

Amoco Egypt Ras El Barr BV 1 Ha'py new pool wildcat in the Nile Delta region cut 260 ft of gross pay in three Pliocene zones at 5,180-5,400 ft. The well flowed on tests of the three zones at rates of 57 MMcfd, 17 MMcfd, and 13 MMcfd, along with condensate at a ratio of 1-3 bbl/MMcf of gas. Amoco plans further drilling in Miocene sands in the Nile Delta area this year. It is drilling the 1 Akhen new pool wildcat on the same concession, targeting a deeper Miocene formation.

Total 55% and Amoco Corp. 45% gauged a combined 14,200 b/d of light oil from two zones at 5,000 m in a deeper pay discovery on the Jusepin oil field permit in Northeast Venezuela. The permit was assigned the two companies under Venezuela's marginal fields reactivation program, which allows exploration of deeper horizons. Plans call for another deep well to be drilled soon in Jusepin, which produced oil from shallower pay during 1938-89. In addition, operator Total will begin a pilot waterflood in Jusepin's shallow zones in April.

PanCanadian Petroleum Ltd., Calgary, acquired a farmout on about 50% of U.K. North Sea exploration acreage held by Oryx Energy Co., Dallas, in return for PanCanadian funding a $55 million exploration and appraisal program the next 3-4 years. The deal involves nonproducing portions of 25 blocks, with spending to cover seismic surveys and drilling outside producing field boundaries.

Total SA found more gas near the Corridor block gas project in South Sumatra, interest owner Gulf Canada Resources Ltd. reported. Total's 1 Bungkal wildcat flowed 36.5 MMcfd of gas with 60% CO2 content from four zones. The well is on South Jambi B production sharing contract (PSC) area, 13 km northwest of Dayung, the biggest gas field being developed by Gulf and partners as part of the Corridor block project. PSC interests are Gulf 45%, Pertamina 25%, and Total 30%, earned by funding seismic surveys and drilling two wildcats, including 1 Bungkal. Plans call for seismic surveys this year and more drilling in 1997.

UMC Pakistan Corp., a unit of United Meridian Corp., Houston, obtained an exploration license in Pakistan. It covers 7,480 sq km in the Gawadar district and off Meran in Baluchistan. UMC will conduct geological and seismic studies and drill wildcats under an initial 3 year term with a commitment of at least $4.5 million.

Norway's Saga Petroleum AS plans to acquire 3D seismic data covering almost 2,500 sq km off Norway beginning in April. It chartered the MV SeisRanger seismic vessel from Geco Prakla to carry out the work, consisting of three surveys of three areas incorporating Gjallar Ridge, Block 6508/1 in the Norwegian Sea, and North Sea Block 35/12. The acreage was awarded in Norway's recent 15th licensing round.

Abacan Resource Corp., Calgary, plans a wildcat on Block 309 in the Benin basin off Nigeria. The Sedco Forex Trident VIII jack up will drill the well to TVD of 12,500 ft in about 295 ft of water 28 miles offshore. The 413,000 acre block is near Seme producing oil field. The company is continuing to develop its NGO oil field discovery in the Niger River delta region, where it is conducting a 3D seismic survey of Blocks 469 and 237.

Exports-imports

OMV AG, Vienna, increased by 17.5 bcf/year the volume of gas it imports from Russia's Gazprom. This will hike OMV's imports of Russian gas to 192.5 bcf/year. The Austrian state company also imports 52.5 bcf/year from Norway. Along with OMV's 31.5 bcf/year share of Austria's gas production, the imports secure Austria's gas requirements well into the next century.

Petrochemicals

Tongyang Nylon Co., Seoul, chose Union Carbide Corp.'s Unipol process for a planned 110,000 metric ton/year polypropylene plant at its Ulsan, South Korea, petrochemical complex. The unit is scheduled for completion in 1997. The plant will be designed to produce polypropylene homopolymers, random copolymers, and impact copolymers. Tongyang currently operates an 80,000 ton/year polypropylene plant at Ulsan, which started up in 1991 using another technology.

Borealis AS, Copenhagen, will expand cracker capacity at its Porvoo, Finland, ethylene plant with an $88 million project. This will raise ethylene capacity by 25% to 290,000 metric tons/year and propylene capacity by 20% to 170,000 tons/year. Work is to begin immediately, with completion scheduled for late spring 1997.

Sasol Ltd., Johannesburg, plans to spend $100 million for a new air separation plant to provide oxygen and nitrogen for its coal based petrochemical plant at Sasolburg, South Africa. The new unit will produce 2,100 tons/day of oxygen, 1,400 tons/day of nitrogen, and 50 tons/day of argon. The plant is to be commissioned in March 1998, after which an existing eight train oxygen plant will be decommissioned. The new plant will cut cost of producing synthesis gas by 10%.

Oilsands

Japan Canada Oil Sands Ltd. will spend as much as $69 million (Canadian) in 1997 to reactivate a dormant Alberta oilsands project. A pilot project using steam assisted gravity drainage and horizontal drilling at Hangingstone, Alta., 28 miles south of Fort McMurray, will initially produce 2,000 b/d of oil. If the pilot is successful, additional drilling will increase production to 10,000 b/d by 2000. Construction is planned for early 1997.

Drilling-production

Texas Petroleum Co., the Colombian unit of Texaco Inc., is ahead of schedule for planned start-up of a second production platform it is installing off Colombia's Caribbean coast. Plans call for the platform in Chuchupa gas field off La Guajira Peninsula to start up by yearend vs. the earlier scheduled date of February 1997. The platform has capacity of 300 MMcfd, but output at first will be 140-150 MMcfd and could be ratcheted up to meet market demand. Chuchupa platform, pipeline, and horizontal wells cost $100 million. Together with the other platform and two onshore producing sites, the Chuchupa association contract accounts for almost all of Colombia's gas production at more than 500 MMcfd.

British Gas plc started production of 30 MMcfd of gas from a single well in Dolphin gas field on Block 6 off Trinidad. The 1 tcf field was discovered in 1976, 55 miles off Trinidad's southeast coast. A second well was spudded Mar. 13 from the Dolphin platform to further develop the field. British Gas and 50-50 partner Texaco Inc. eventually will supply as much as 275 MMcfd of gas from Dolphin to National Gas Co. of Trinidad under a 20 year contract.

Dominion Reserves Inc., a unit of Dominion Energy Inc., Richmond, Va., 75% and American Exploration Co. (Amex), Houston, 25% purchased working interests in five Gulf of Mexico blocks from a private seller for $56 million. Involved are a total 45 bcf of gas and 2.4 million bbl of liquids reserves, 97% of which underlie High Island 45, East Cameron 129, and South Marsh Island 133 blocks. Amex will operate those three blocks.

Noble Drilling Corp., Houston, signed a letter of intent to acquire the Neddrill drilling unit of Royal Nedlloyd NV, Rotterdam, for $300 million cash and 5 million shares of Noble common stock. The combined companies would be one of the biggest drilling contractors and integrated oil field service providers with 55 mobile offshore units. Noble recently disclosed plans to expand its jack up fleet through acquisitions (OGJ, Mar. 11, p. 39).

Pride Petroleum Services Inc., Houston, signed a letter of intent to acquire Quitral-Co. SAIC from Argentina's Perez Companc SA, Astra Capsa, and other shareholders for about $140 million in cash and notes. Quitral-Co. is the biggest drilling and workover contractor in Argentina, with additional operations in Venezuela. The deal excludes certain nonoil field service investments of Quitral-Co., which operates 23 drilling and 57 workover rigs in Argentina and 21 workover rigs in Venezuela.

Workfox BV, Ijmuiden, Netherlands, acquired the Transocean 4 accommodation semisubmersible unit from Transocean AS, Tananger, Norway, for $2.8 million plus $1.9 million for contracts arranged to 1999. Transocean sold its only accommodation rig in line with its strategy to concentrate on marketing third and fourth generation semisubmersible drilling rigs.

Companies

Betz Laboratories Inc., Trevose, Pa., agreed to acquire the Dearborn business unit of W.R. Grace & Co. for $632 million. Dearborn supplies water and process treatment chemicals to the petroleum industry. The boards of both companies have approved the sale, expected to close in second quarter 1996. The combined companies will have sales of about $1.2 billion/year.

TransCanada PipeLines Ltd., Calgary, completed a takeover of Alberta Natural Gas Co. (ANG), Calgary. More than 85% of shareholders of the chemical and pipeline company took a cash offer of $26.25 (Canadian)/share in a share or cash offer by TransCanada, which previously owned 49.5% of ANG.

Software

Shell Oil Co. and Simulation Sciences Inc. (SimSci) are codeveloping rigorous online modeling and equation based optimization (Romeo) software for processing plant operations. Romeo will enable plant personnel to model process units and optimize operations plant-wide. Shell will install the software at selected sites early in 1997, after which it will be available commercially from SimSci.

Pipelines

Canada's National Energy Board ordered Interprovincial Pipe Line Ltd., Calgary, to reduce pressure on a section of its crude oil pipeline, which has experienced four leaks since 1989. The 121 mile section, built in 1968, extends from Odessa, Sask., and Cromer, Man. The company inspected the section in 1995 after a second rupture occurred. Ruptures were caused by fatigue corrosion. None of the spills caused harm to people or animals, and all were cleaned up and soil restored. The pressure cut of as much as 20% will reduce shipments on IPL Line 3 by 6,300 b/d. Total throughput on the system is 1.6 million b/d. IPL plans an extensive inspection program this summer.

Portland Natural Gas Transmission System (Pngts), Portland, Me., filed with Federal Energy Regulatory Commission for a certificate to construct and operate a 242 mile, 20 in. gas pipeline from a connection with TransCanada PipeLines at the U.S.-Canada border near Jay, Vt., to a connection with Tenneco's Tennessee Gas Pipeline at Haverhill, Mass. The Pngts line will have an initial throughput of 178 MMcfd and start up Nov. 1, 1998. An international group that includes Tenneco and TransCanada is sponsoring the project, which started the regulatory application process in 1993 (OGJ, Mar. 1, 1993, p. 41).

Mobil Pipe Line Co. is negotiating an agreement with Texaco Pipeline Inc. to connect Mobil's Midcontinent crude oil pipeline system to the Cushing, Okla., crude oil distribution and trading hub. Mobil wants to lay a 100,000 b/d spur from its system at Ringgold, Tex., to Texaco's Basin Pipeline at Wichita Falls, Tex. This would provide direct access to Cushing via Basin Pipeline capacity Mobil would lease from Midland, Tex., to Cushing. Under the deal, Texaco would obtain Mobil's pipeline from Midland to Corsicana, Tex., for potential use as a products line.

Gas distribution

Pacific Enterprises International (PEI), Los Angeles, agreed to buy a 12.5% interest in each of two Argentine gas utility holding companies. This will be the first non-U.S. investment in a local gas distribution company (LDC) for Pacific Enterprises, parent of Southern California Gas Co. PEI will pay $48.5 million to Citicorp Equity Investments SA for half of its 25% stake in Sodigas Pampeana SA and Sodigas Sur SA, which operate LDCs in Central and South Argentina, respectively. The two LDCs, privatized in 1992, serve about 1.1 million customers with 625 MMcfd of gas.

Associations

KN Energy Inc., Bay Gas Storage Co. Ltd., and Market Hub Partners formed the Hub Association of North America (HANA), a nonprofit Delaware corporation with operating headquarters in Houston. HANA will develop and promote technical advances, legislation, and government regulations to improve business conditions in the natural gas hub industry. Membership is open to all qualified hub operators, with associate memberships available to others in the North American natural gas industry. A special foreign affiliate membership is available for entities outside North America.