INDUSTRY BRIEFS

Petrochemicals

Saudi Basic Industries Corp. (Sabic), Riyadh, signed agreements with local, regional, and international banks to borrow $850 million for construction of the $1.9 billion Ibn Rushd (Arabian Industrial Fibers Co.) project at Yanbu, Saudi Arabia. A 140,000 metric ton/year polyester plant came on stream in 1995; currently being built are a 350,000 ton/year purified terephthalic acid unit and a 730,000 ton/year aromatics plant, due on stream in early 1998 (OGJ, Dec. 2, 1996, p. 38). Sabic unit Petrokemya (Arabian Petrochemical Co.) signed an agreement with Stone & Webster, Boston, to build an 800,000 metric ton/year flexible-feedstock ethylene plant with a 275,000 ton/year propane cracking unit at its Al-Jubail complex. Basic engineering is under way for the plant, which can use propane or ethane feed. The project, due on stream in first quarter 2000, also will supply ethylene for another plant expansion by Sabic unit Sharq (Eastern Petrochemical Co.). Sharq is doubling capacity of ethylene glycol and polyethylene the second time this decade, after finishing a 289,000 ton/year expansion in 1994 (OGJ, Apr. 12, 1993, p. 70). Huntsman Corp., Salt Lake City, completed its $600 million purchase of Texaco Inc.'s propylene oxide/methyl tertiary butyl ether (PO/MTBE) business at Port Neches, Tex. (OGJ, Jan. 13, 1997, p. 28). As part of the deal, Huntsman also acquired Texaco's exclusive PO/MTBE technology, including rights to license the technology worldwide. The deal makes Huntsman the second largest U.S. MTBE producer, with capacity of more than 27,000 b/d.

Terminals

Van Ommeren Terminals, Netherlands, is mulling an undetermined expansion of capacity at a tank terminal now under construction in Fujairah. The current $82 million project includes 18 tanks with combined storage capacity of 3 million bbl. The terminal is expected to come on stream in fourth quarter 1998.

Refining

U.S. Commerce Department's Foreign Trade Zones (FTZ) Board approved subzone FTZ status for three refineries, exempting from certain import duties Marathon Oil Co.'s refinery in Wayne County, Mich., Chevron Products Co.'s plant at Perth Amboy, N.J., and Shell Oil Co.'s Madison County, Ill., plant.

Companies

Vermilion Resources Ltd., Calgary, will buy 12 oil fields from Esso France unit Esso Rep. Six are in the Aquitaine basin, including Cazaux, Les Arbousiers, Les Pins, and the recent Courbey-Cap find; 9 years remain on the 50-year concession. The others, including Vert-le-Grand and Itteville, both held 50% by Elf Aquitaine, are in the Paris basin. Although declining, the Paris basin fields' output is expected to stabilize in 1997-98. The 12 fields account for 20% of Esso Rep's total French output of about 20,000 b/d; with remaining fields, Esso will still be France's top producer. Russian oil producer Chernogorneft AOA will obtain a $50 million loan from European Bank for Reconstruction & Development (EBRD), London. The loan will fund drilling and replacement of corroded pipelines in Samotlor oil field in western Siberia and recultivation of areas contaminated by spilled oil. EBRD lent $40 million in 1993 to a joint venture firm owned by Chernogorneft and Anderman/Smith Overseas Inc., Denver. DI Industries Inc., Houston, will pay $61.6 million for Grey Wolf Drilling Co., Lafayette, La. Terms call for Grey Wolf to merge with DI's unit Drillers Inc. Grey Wolf is an onshore drilling contractor focused in South Louisiana and the upper Texas Gulf Coast.

DI is a contract drilling service. El Paso Energy Corp., Houston, will cut another 329 employees after an earlier cut of 261 and says its post-Tenneco Energy acquisition reorganization is now essentially complete.

Pipelines

Petergaz, a joint venture of Russia's Gazprom and Heerema Group of Cos., Geneva, will manage the 400-km offshore section of a planned gas pipeline across the Black Sea from Djubga, Russia, to Samsun, Turkey. The 1.5 bcfd pipeline, slated for completion in 2000, will pass through water 2,100 m deep. Petergaz is conducting a feasibility study. Gaz de France (GdF) agreed to spend more than $526.5 million to build the 550-km, 900-1,100 mm diameter French section of a proposed natural gas pipeline linking Norway to Italy (OGJ, Jan. 8, 1996, p. 16). The pipeline would enable delivery of 6-8 billion cu m of gas Italy agreed to buy from Norway in January. If the pipeline leg is built, GdF would recoup its investment from transportation revenues. Destin Pipeline Co. LLC, Houston, a joint venture of Shell Oil Co., Amoco Corp., and Sonat Inc., is holding an open season through Apr. 30 to reserve capacity on its proposed 210-mile, 36-in., 1 bcfd gas pipeline connecting the eastern Gulf of Mexico with major onshore interstate pipelines in Mississippi (OGJ, Feb. 3, 1997, p. 26). Destin filed with the Federal Energy Regulatory Commission in mid-March and hopes to start construction by late 1997-early 1998 for start-up by mid-1998. Shell and Amoco have committed significant supplies to the pipeline and reserved more than 50% of its capacity. U.S. Federal Energy Regulatory Commission ordered its staff to audit the allocation of capacity by Natural Gas Pipeline Co. of America. Amoco Production Co. and Amoco Energy Trading Co. filed a complaint with FERC alleging the pipeline was favoring an affiliate, MidCon Gas Services Co., in capacity allocations.

Spills

U.S. Minerals Management Service proposed a rule setting oil spill insurance requirements for most offshore operators at $35 million. The regulation would implement last year's Coast Guard Authorization Act, which rolled back the $150 million financial responsibility requirements in the 1990 Oil Pollution Act.

Drilling-production

Consolidated Natural Gas Co., Pittsburgh, disclosed that its Neptune project in the deepwater Gulf of Mexico is on stream and producing 4,800 b/d of oil equivalent from the first well. Plans are to step up output to 25,000 b/d of oil and 30 MMcfd of natural gas. By late summer, six additional wells are slated to begin production; other wells will be drilled in 1998-99 to maintain output. The project is the first to use a spar-design floating production platform (OGJ, Jan. 13, 1997, p. 53). CNG and Oryx Energy Co., Dallas, each hold a 50% interest. Nabors Industries Inc., Houston, signed a definitive agreement to pay $85 million to acquire Samson Rig Co. and Rig Properties Inc. from a unit of Samson Investment Co., Tulsa. The acquired property consists of 25 stacked diesel electric SCR rigs, most of which can drill to depths greater than 15,000 ft, plus component equipment, including large triplex mud pumps, bore engines, mud and well control systems, and self-elevating substructures. Snyder Oil Corp. (SOCO), Fort Worth, targeted about $48 million of its 1997 $112 million capital budget-up 120% from 1996 excluding acquisitions-for its development work in the Gulf of Mexico.

Significant projects include platform installation and development drilling at Main Pass 261 and South Timbalier 231 and continued development at Main Pass 255/259 blocks. SOCO also expects other development and exploration prospects to be generated from its review of 3D seismic over several of its other gulf fields. Flores & Rucks Inc., Baton Rouge, paid $55.7 million to acquire a 100% working interest in 27 wells on state leases off Plaquemines Parish, La., in Main Pass Block 66 field in the Gulf of Mexico. Current estimated production from the wells is about 3,000 b/d of oil equivalent net to the company, which now owns about 22,000 gross acres in the field. Miller Petroleum Inc., Huntsville, Tenn., plans to drill 20-30 natural gas wells on its Tennessee leases in 1997-98. The company went public this past December after merging with Delaware-based Triple Chips Systems Inc. BP Exploration Operating Co. Ltd. purchased a license from Dailey Petroleum Services Corp., Conroe, Tex., for use of its patented catenary well profile. BP plans to use the profile in a well to be drilled in Wytch Farm oil field on the U.K.'s southern coast. BP sees the technique as a way to reduce torque and drag in extended-reach wells. BP has drilled 12 extended-reach wells in Wytch Farm, the longest more than 8 km, and plans to drill three more. Wytch Farm's offshore reservoir was developed from an onshore site (OGJ, Jan. 3, 1994, p. 30). Norway's Den norske stats oljeselskap AS (Statoil) ordered a new drillship based on its multipurpose shuttle tanker (MST) hull design from Astilleros Espanoles SA, Madrid. This follows a letter of intent to Statoil and drilling contractor Smedvig AS, Stavanger, for a 5-year charter of a drillship by Shell Deepwater Development Inc. Shell will use the ship in its Gulf of Mexico deepwater exploration program beginning in 1999. The first MST drillship is being built for Statoil's Aasgard development in the Norwegian Sea (OGJ, Feb. 3, 1997, p. 28).

Gas storage

Sabine Hub Services, a unit of Texaco Petroleum Inc., and units of Dominion Energy Inc., Richmond, Va., and Energy Spectrum Partners LP, Dallas, expect a full-service natural gas hub and storage facility they are building about 80 miles west of Edmonton to begin operating by April 1997. The hub will interconnect with NOVA Gas Transmission Ltd.'s Epson mainline. The storage site is a depleted gas reservoir with 25 bcf working capacity and a peak injection/withdrawal rate of 500 MMcfd.

Exploration

Ranger Oil Ltd., Calgary, signed a production-sharing agreement with Cote d'Ivoire for offshore Block CI-102. The block lies immediately south of Abidjan in mainly less than 200 m of water. It lies between Espoir oil field to the west and Belier oil field to the east. License interest holders are operator Ranger, Clyde Expro plc, and Energy Africa Ltd. 24% each; Gentry Resources Ltd. 11%; TC Petroleum Inc. 5%; and state-owned Petroci 12%. Energy Development Corp. (China), a unit of Noble Affiliates Inc., Ardmore, Okla., will acquire all the rights of Amoco Orient Petroleum Co. in the Cheng Dao Xi exploration block in Bohai Bay off China. The block covers about 37,000 acres near Shengli onshore oil field, one of China's largest. It was the first block awarded to a foreign oil company in the Shengli area and contains seven wells drilled by the Chinese that tested for oil. The deal is subject to approval of Chinese government agencies.

LPG

LPG shipments will enter the new Mendez receiving terminal near Ciudad Juarez, Mexico, Apr. 1 from the newly commissioned Rio Grande LPG pipeline near Odessa, Tex. (OGJ, Nov. 4, 1995, p. 46). The 8-in., 24,000 b/d capacity former refined products line was recently converted to LPG service; additional pumping could boost capacity to 45,000-50,000 b/d. The joint-venture pipeline is owned by operator Mapco Inc. 45%, Amoco Corp. 30%, and Holly Corp. unit Navajo Pipeline Co. 25%. Petroleos Mexicanos owns and operates a new 21.5-mile, 8-in. line from the Texas-Mexico border to the terminal, which has storage capacity of 30,000 bbl. Construction could begin as early as this summer on an LPG storage and export terminal at Poti, Georgia, to receive rail shipments of Russian LPG. Shipments from the terminal are destined for Turkey, where LPG consumption reached 2.6 million metric tons in 1996. Initial stage of the project will involve two spherical tanks-one 4,000 cu m propane and one 5,000 cu m mixed LPG tank-along with a pier with two marine loading arms. Targeted service date is mid-1998. Within 5 years, the complex could be expanded to five 4,000 cu m propane tanks and two 5,000 cu m mixed LPG tanks.

Exports-imports

Norway's Gas Negotiating Committee (GFU) of producing companies expects to sign a sales contract early in April for delivery of gas to the Czech Republic. GFU leader Statoil expects deliveries to start May 1 and last 20 years, with a plateau rate of 105 bcf/year. Gas will be delivered to Czech firm Transgas via the Norpipe offshore trunk line to Emden, Germany, and then through the German Netra pipeline to the Czech border.

Alternate fuels

BP Solar, a unit of British Petroleum Co. plc, secured the world's largest solar project contract from the Philippines government. The $30 million, 3-year contract calls for design, supply, and installation of more than 1,000 packaged solar power systems in more than 400 remote villages in the Visayas and Mindanao regions. The systems will be made in Sydney. The project was funded by a concessional loan from Australian Export Finance & Insurance Corp. and a grant from the Australian government.

Catalysts

CRI International Inc., Houston, will expand its actiCAT presulfiding capacity by doubling the number of plants. New actiCAT plants of about 10 million lb/year each are being built at Medicine Hat, Alta., and Singapore, with start-up for both slated for first quarter 1998. CRI's process more thoroughly activates catalysts to reduce refinery downtime during turnarounds and enables simpler start-up. It can also eliminate use of sulfur spiking agents (OGJ, July 1, 1996, p. 130).