Industry Briefs

Correction

A quote about the potential opposition of Afghani factions to the proposed Turkmenistan-to-Pakistan pipeline route was incorrectly attributed to Batyr Sardjaev, Turkmenistan's Deputy Prime Minister and Minister of Oil and Gas Industry (OGJ, Nov. 10, 1997, Newsletter). The statement was made by Unocal Corp.'s Chris Taggart. Unocal is a major participant in the proposed line (OGJ, Nov. 3, 1997, p. 31).

Government

The U.S. Senate confirmed the nominations of Curtis Hebert Jr. and Linda Breathitt to fill out the Federal Energy Regulatory Commission (OGJ, Nov. 10, 1997, Newsletter). Hebert, of Pasca- goula, Miss., was a member of the Mississippi Public Service Commission and its chairman in 1994-96. Breathitt, of Lexington, Ky., was chairman of the Kentucky Public Service Commission.

LNG

AGL Resources Inc., Atlanta, and Southern Natural Gas Co., a subsidiary of Sonat Inc., Birmingham, Ala., signed a letter of intent to jointly build, own, and operate a liquefied natural gas storage and peaking facility in Polk County, Ga., under the name Etowah LNG. Each company will own half of the $90 million project, which will have 3 bcf of storage capacity and 450 MMcfd of vaporization capacity. Open season will be December 1997-January 1998. Construction is to begin in 1999.

Gas processing

Texaco Exploration & Production Inc. and NGC Corp. subsidiary Warren Petroleum Co. LP, Houston, are discussing a possible merger of gas gathering and processing assets in New Mexico and Texas. The proposed limited liability company would oversee Texaco's Buckeye and Eunice gathering systems and plants and Warren's Eunice, Monument, and Saunders Complex gathering systems and plants. The companies hope to gain operating efficiencies and economies of scale.

India's Oil & Natural Gas Corp.
(ONGC) commissioned Phase 2A of its Hazira gas plant expansion. The 1 billion rupee ($28 million) project increased processing capacity to 41 million cu m/day from 30 million cu m/day. ONGC added two sweetening units, two gas dehydration units, a condensate fractionation unit, and related utilities and offsites. The expansion was needed to handle added production from Mukta, Panna, and Tapti gas fields, developed by Reliance Industries Ltd. and Enron Corp. The plant can now convert sour gas to sweet gas for customers of the Hazira-Bijaipur-Jagdishpur pipeline.

Novagas Canada Ltd.
(NCL), Calgary, agreed to assume operation and control of the Harmattan gas processing plant in Alberta by March 1998. The 380 MMcfd plant is currently majority-owned by Mobil Oil Canada Ltd. (56%). NCL will invest about $35 million to improve recovery of NGL and increase sulfur-recovery efficiency. Modifications could be complete by October 1998.

Tonkawa Gas Processing Co.,
Dallas, agreed to acquire the 50% interest of Oneok Inc., Tulsa, in 11 gas processing plants in western Oklahoma. Tonkawa already owns the other half. The plants have a maximum gross gas capacity of 475 MMcfd and a maximum gross NGL production capacity of 1.3 million gpd. In a separate transaction, Delhi Gas Pipeline Corp., an affiliate of Tonkawa, agreed to purchase a 95-mile Oneok gathering system in Oklahoma's Blaine, Canadian, and Caddo counties.

Gas marketing

Office of Gas Supply (Ofgas), the U.K. gas industry regulator, proposed changing the terms in licenses for independent gas suppliers following complaints of rogue sales teams in areas opened to gas competition. Ofgas suggested license holders keep records of marketing complaints and submit them to Ofgas for publication at 3-month intervals. Companies that mislead customers would be liable to pay compensation, while fines and suspensions of licenses would be used to ensure compliance with license terms.

Exploration

U.S. Minerals Management Service decided to allow ARCO to drill a wildcat 3 miles off Alaska's Arctic National Wildlife Refuge coast. Nine environmental groups had asked MMS to reject ARCO's plans to drill its Warthog prospect because of the potential for an oil spill.

Esso Production Malaysia Inc.
and Diamond Gas Exploration Ltd., a subsidiary of Mitsubishi Corp., signed a farm-out agreement on four deepwater blocks off Malaysia's Sarawak state. Esso will operate Blocks SK-A, B, C, and D and hold a 32.5% interest. Diamond Gas will have a 12.5% interest. The remaining 55% will be held by original consortium members Mobil Petroleum Malaysia Inc. (former operator), Nippon Oil Exploration Ltd., Japex Sarawak Offshore Ltd., Norsk Hydro Sarawak AB, and Petronas Carigali Sdn. Bhd. Esso plans to gather 1,500 km of 2D seismic by yearend.

Triton Energy Ltd.,
Dallas, discovered an eighth gas field in the Malaysia-Thailand joint development area (OGJ, Sept. 22, 1997, p. 42). On test, Wira-1 well flowed at a maximum rate of 9.1 MMcfd of gas and 137 b/d of 61° gravity condensate through a 2-in. choke with flowing tubing pressure of 361 psi. The well was drilled in 174 ft of water to 10,000 ft TD and cut pay at 6,051-6,064 ft.

Pakistan
granted two exploration licenses to a joint venture of operator OMV Pakistan Exploration GmbH and Government Holdings (repository of state interests). Indus Delta block covers 3772 sq km offshore; Shah Bandar block covers 2,415 sq km in Thatta district, Sindh. The joint venture will invest about $11 million for exploration. On Shah Bandark, OMV has committed to reinterpreting existing seismic, with an option to acquire 200 line-km of 2D seismic data and drill one well. On Indus Delta, OMV has committed to reinterpreting existing seismic, with an option to acquire 300 line-km of new data and drill one well.

Pipelines

Columbia Gas Transmission Corp., Charleston, W.Va., completed the sale of 1,800 miles of gathering lines and facilities in Ohio to Gatherco Inc. A group of eastern Ohio gas producers formed Gatherco to buy and operate the system.

Petroleo Brasileiro SA
(Petrobras) will build a 500-km gas pipeline in the northern Brazilian state of Amazonas. The $175 million line will connect the Urucu oil and gas field to Puerto Velho in Rondonia, another northern state. Combined, the Urucu and Jurua gas fields have the country's second largest gas reserves at 738 billion cu m. Construction of the line will start early in 1998.

Alliance Pipeline
group has shipping commitments for $8 billion (Canadian) and 98% of capacity on its proposed British Columbia-to-Chicago gas line (OGJ, Aug. 25, 1997, p. 29). Canada's National Energy Board is holding hearings on the line this week. The line is opposed by NOVA Corp., Calgary, which says the Alberta section will duplicate its pipeline facilities. Alliance's Jack Crawford said the "artificial" problems are being created by NOVA and TransCanada PipeLines Ltd., which "are trying to claw themselves back into the game." Talks on a possible deal between NOVA and Alliance failed earlier this year.

U.S. Department of Transportation's
Research and Special Programs Administration (RSPA) was forced to withdraw a rule excluding certain low-stress pipelines from its safety standards for hazardous liquids pipelines. It said the California Department of Fish and Game objected to the direct final rule, forcing RSPA into a longer rulemaking process.

Spills

Colonial Pipeline Co. agreed to pay a $1.5 million fine and spend up to $2.5 million to restore the area near a March 1993 oil spill in northern Virginia. Colonial's products line ruptured and spilled about 407,000 gal of diesel fuel into a Potomac River tributary, threatening water supplies in Virginia, Maryland, and the District of Columbia. Colonial alleged a third party had damaged the line, but its lawsuit against that party was unsuccessful.

Companies

Deminex U.K. Oil & Gas Ltd. announced an asset exchange with fellow London firm Lasmo plc. Deminex will receive an 8.5% interest in U.K. North Sea Block 15/27, site of Renee discovery, in return for an 18% interest in Block 15/18a.

Mobil Technology Co.
formed an alliance with Akzo Nobel Catalysts, M.W. Kellogg Co., and Fina Research SA to offer a broad range of process and catalyst services, including development, marketing, and licensing of dewaxing, hydrocracking, and aromatics hydrogenation technologies. A major commitment covers research and development programs.

TransCanada PipeLines Ltd.
formed a joint venture with Wood Group Gas Turbines, Aberdeen, for pipeline repair and overhaul services in Calgary. The companies are building a $5 million facility, scheduled to begin operating in mid-1988. They will invest $17 million in development.

A unit of
Rigel Energy Corp., Calgary, acquired assets in the MacCulloch field and adjacent blocks in U.K Continental Shelf Quadrant 15 from Conoco (U.K.) Ltd. for $96 million. The deal by Rigel Petroleum U.K. Ltd. includes a 20% interest in the MacCulloch Field and 25-35% interests in adjacent Blocks 15/14a, 15/19, and 15/25b. Production of light MacCulloch crude began in August at 30,000 b/d and is expected to reach 50,000-60,000 b/d by yearend.

Tetra Tech Inc.,
Dallas, agreed to purchase the assets of the environmental services business of Halliburton's Brown & Root Inc. for cash consideration of $32 million.

Petrochemicals

Indonesia's PT Peni polyethylene joint venture will build a 900,000 metric ton/year ethylene plant at Bojonegara, West Java. BP holds a 51% stake in the company. The plant will be linked by a 12-km pipeline to PT Peni's polyethylene plant, which is already linked to PT Chandra Asri's ethylene complex. The new unit will cost $800 million-1 billion and should start up by yearend 2000.

Phillips Petroleum Co.
will soon begin licensing its acetylene hydrogenation catalyst technology, E-Series, to ethylene producers worldwide. Phillips says the catalyst increases ethylene production by allowing conversion of almost all byproduct acetylene to ethylene. Phillips's Sweeny, Tex., complex has been using the technology since 1995.

Metallgesellschaft AG,
Frankfurt am Main, and B+S Methanol Marketing GmbH established a joint venture called MG Methanol Marketing GmbH to expand their methanol trading business. The JV is equally owned by both companies and is intended to cope with foreseen growing demand for methanol.

Ultramar Diamond Shamrock Corp.
(UDS), San Antonio, let contract to Kvaerner John Brown, Houston, to build a third propane-propylene splitter at the Mont Belvieu, Tex., plant jointly owned by UDS and Fina Oil & Chemical Co. The splitter, scheduled for completion in August 1998, will bring capacity at the site to 2.6 billion lb/year. An increase to 3 billion lb/year is planned in 1999.

Drilling-production

BHP Petroleum Pty. Ltd. received approval by the Australian-Indonesian Joint Authority to develop Kakatua North oil field on Block ZOCA 91-12 in the Timor Sea zone of cooperation (see map, OGJ, Jan. 2, 1995, p. 22). Kakatua North will be developed as a single-well subsea satellite of BHP's Elang/Kakatua development, under way. First oil is slated for December 1998, 6 months after the Elang/Kakatua floating production, storage, and offloading (FPSO) system is due on stream. Kakatua North lies 12 km from the FPSO site and is expected to increase total reserves for the complex by 12 million bbl of oil to 29 million bbl.

Mobil Oil Canada Ltd.,
citing application of new technology, hiked its reserve estimate for Hibernia oil field off Newfoundland to 750 million bbl from 615 million bbl. The field is expected to begin production this month after more than 5 years of development planning. Mobil, which has a 33% interest in Hibernia, expects production to reach 135,000 b/d by early 1999. The production system is designed for a maximum capacity of 150,000 b/d but could be expanded to 180,000 b/d by 2000. Calgary's Petro-Canada Ltd., a 20% owner of Hibernia, said Mobil's estimates are plausible, but it will not change its own at this time.

Ranger Oil Ltd.
took a 24% interest and operatorship in a production-sharing contract on Block CI-26 off Côte d'Ivoire. Its partners are Addax Petroleum Côte d'Ivoire 42%, Tullow Côte d'Ivoire Ltd. 24%, and state-owned Petroci 10%. Ranger said remaining reserves in Espoir field on the block are 70 million bbl of oil and 200 bcf of gas. Partners are considering a $250 million redevelopment of the field, which was shut down in 1988. Engineering studies are under way, and a decision is expected next year. Production of 20,000-25,000 b/d could begin as early as 2000. Ranger says the block has additional exploration potential.

Poco Petroleums Ltd.,
Calgary, increased its 1997 capital budget by $50 million (Canadian) to $550 million. Poco will drill about 25 more wells in Alberta and shoot additional seismic in the fourth quarter. The company reports a number of discoveries, including one in the Slave Point formation at Firebird in the northern region. A horizontal, underbalanced well flowed 3,000 b/d of light, sweet crude on test and is expected to produce 1,500-2,000 b/d when in full production.

Petrobras
let contract to Kvaerner Oilfield Products AS, Oslo, for supply of five subsea christmas trees capable of operating in up to 2,500 m of water. Under a $12 million contract, Kvaerner is to supply and install the trees in the Campos basin off Brazil. Petrobras and Kvaerner also agreed on a $5.6 million christmas tree prototype development program.