GENERAL INTEREST Quick Takes
Fielder appointed Noble Midstream president and COO
Robin H. Fielder was appointed president and chief operating officer of Noble Midstream Partners LP, Houston, and senior vice-president, midstream, of Noble Energy Inc., effective Jan. 13, 2020. She will report to Brent Smolik, the partnership’s chief executive officer, who is also president and chief operating officer of Noble Energy.
Fielder has nearly 20 years of experience in the oil and gas industry across a range of disciplines, including reservoir engineering, upstream and midstream planning, and investor relations. She most recently served as president, chief executive officer, and director of Western Midstream Partners LP and senior vice-president, midstream and marketing at Anadarko Petroleum Corp. from 2018 to 2019.
ConocoPhillips farms into 3D Oil offshore Otway permit
ConocoPhillips has farmed into a 75% interest in Tasmanian offshore Otway basin permit T/49P held by 3D Oil Ltd., Melbourne.
CP will pay 3D Oil $5 million (Aus.) cash in back costs and will carry the company through a 1,580 sq km 3D seismic program across the permit planned for third-quarter 2020. CP also will carry all the drilling costs up to $30 million (Aus.) if it elects to move into the next phase of the program.
CP recently sold all its northern Australian offshore assets to Santos for $1.4 billion, but kept its non-operated interests in Australia Pacific LNG’s export project on Curtis Island in Queensland. It has now moved offshore Tasmania where there are still hopes for significant gas finds.
The planned 2020 Dorrigo seismic program is aimed at delineating targets on trend with the producing Thylacine and Geographe fields northwest of T/49P.
The program will be conducted about 18 km west of King Island in water depths of 100-840 m targeting leads in the central and southern parts of the permit. These include Harbinger, Whistler Point, and Seal Rocks.
A previous survey across the north of the permit funded by Beach Energy Ltd. confirmed the Flanagan prospect which has a best estimate potential resource of up to 1.4 tcf.
3D Oil will retain a 25% interest in the permit.
Richard succeeds Clarkson as Savannah Petroleum COO
Antoine Richard has been appointed chief operating officer of Savannah Petroleum PLC, the British independent oil and gas company focused on activities in Niger and Nigeria. Based in Lagos, Richard succeeds David Clarkson who, having served as chief operating officer since June 2018, will return to his role on Savannah’s board as a non-executive director.
Richard has over 20 years of experience in the oil and gas industry, including over 10 years of experience working in West Africa. He previously was vice president of operations for Savannah from 2016 to 2018.
His operational background includes a focus on production optimization, onshore facilities design and operation, management of drilling campaigns and seismic acquisition programs.
Exploration & Development Quick Takes
Lekoil secures funding for Ogo activities
Lekoil has secured funding for the appraisal drilling and initial development program activities on Ogo field. Lekoil 310 Ltd. entered into a $184.0-million binding loan agreement with the Qatar Investment Authority, the sovereign wealth fund of the State of Qatar (QIA).
Lekoil and Optimum Petroleum Development Co., its partner in and operator of OPL 310, agreed in August 2019 to progress activities at the Ogo light oil discovery near shore western Nigeria amid an ongoing dispute as to the legitimate ownership of a 22.86% stake in the license (OGJ Online, Aug. 30, 2019).
The facility will be disbursed in five tranches over 11 months, with the first drawdown expected in February.
Ogo-1 and Ogo-1 ST encountered hydrocarbons within the SynRift and PostRift in 2013 (OGJ Online, June 26, 2013). Lekoil and Optimum are planning a 2-well program targeting dynamic flow data from well test while preserving the drilled wells as producers. Spudding of the first well could occur in the second half of this year.
Beach flow tests Beharra Springs Deep
Beach Energy Ltd., Adelaide, confirmed the presence of a high-quality Kingia Sandstone reservoir in its Beharra Springs Deep-1 wildcat in the onshore North Perth basin production licence L 11.
The company achieved flow rates up to 46 MMcfd on test, with the rate constrained by tubing size.
Beach said that a series of tests were performed at various choke settings to determine characterisation of well deliverability parameters.
The tests were conducted over a 37-m perforated interval in the Kingia reservoir from 3,940-3,977 m.
The 46 MMcfd flow was sustained for 3.75 hr through a 76/64-in. choke with a flowing tubing head pressure of 1,855 psig.
The main flow was conducted at a rate of 35 MMcfd through a 44/64-in. choke with 3,466 psig pressure. The well’s flow rates and pressures were stable throughout the extended test flow period of 96 hr. There was no sign of depletion.
Gas sample analysis indicates a 7% carbon dioxide content and similar composition to existing Redback field wells being produced through the 25 terajoules/day Beharra Springs facilities.
Beach added that the well demonstrated similar productivity characteristics to nearby Waitsia-3 and Waitsia-4 wells tested at record levels in 2019 about 16 km to the north.
Beharra Springs Deep-1 has been shut in to enable downhole gauges to record further sub-surface pressure data that will be integrated with other data to enable estimation of the size of the gas resource and plan for potential follow-up appraisal drilling.
The well itself is expected to be tied into the Beharra Springs gas facility by the end of this year.
In the meantime, the Triese 3D seismic survey has begun in EP 320 and will cover a 200 sq km area to the southeast of Beharra Springs.
Beach is operator with 50%. Mitsui holds the remaining 50% interest.
ExxonMobil awarded Eastern Mediterranean acreage
ExxonMobil plans to begin exploration operations, including acquisition of seismic data, this year on newly acquired acreage offshore Egypt.
The than 1.7 million acres includes 1.2 million acres in the North Marakia Offshore Block, which lies 5 miles offshore Egypt’s northern coast in the Herodotus basin. The remaining 543,000 acres lie in the North East El Amriya Offshore Block in the Nile Delta.
ExxonMobil will operate both blocks and hold 100% interest.
Drilling & Production Quick Takes
International rig count up 8 units in December
The international rig count for December 2019 reached 1,104, an increase of 8 units from November 2019 and up 79 units from the 1,025 counted in December 2018, according to Baker Hughes data (OGJ Online, Dec. 6, 2019).
The international offshore rig count for December 2019 was 257, up 10 units from November 2019, and up 23 units from December 2018.
The worldwide rig count for December 2019 was 2,043, up 1 unit from the 2,042 counted in November 2019, and down 201 units from the 2,244 counted in December 2018.
The average US rig count for December 2019 was 804, down 6 from the 810 counted in November 2019, and down 274 from the 1,078 counted in December 2018.
Europe was down 8 units with 139 in December 2019 and up 44 units year-over-year. Effective June 7, 2019, Ukraine has been added to the Baker Hughes International Rig Count.
Latin America is down 5 units from the previous month with 191 units and down 6 units year-over-year.
The Asia-Pacific region is up 6 with 226 units month-over-month and down 5 units from its year-ago average.
The Middle East is up 13 units month-over-month to 430 and up 36 units year-over-year.
The average Canadian rig count for December 2019 was 135, down 1 unit from the 136 counted in November 2019, and down 6 from the 141 counted in December 2018.
Layang begins commercial oil production through FPSO
JX Nippon Oil & Gas Exploration Corp. subsidiary JX Nippon Oil & Gas Exploration (Malaysia) Ltd., operator of Block SK10 offshore Sarawak, Malaysia, together with Petronas Carigali Sdn Bhd, reported the Dec. 3, 2019 start of commercial oil production from Layang field.
Layang field, discovered in 1991 with natural gas production beginning in May 2017, began oil production using a floating production, storage, and offloading system—FPSO Helang.
Oil production from Layang is estimated at about 3,000 b/d and about 10,000 boe/d with natural gas combined.
Utilization of FPSO Helang is also planned for production and shipping of oil from Helang field in Block SK10. The field was discovered in 1990. Commercial gas production began in 2003.
Oil and natural gas production from Layang and Helang utilizing FPSO Helang is estimated to reach 20,000 boe/d.
Valhall Flank West facility starts production
Aker BP and partner Pandion Energy reported first oil production from Aker BP-operated Valhall Flank West in the North Sea. The facility is a further development of Valhall field in the southern part of the Norwegian Continental Shelf, 290 km offshore.
A plan for development and operation for Valhall Flank West was approved in 2018 with an investment estimate of 5.5 billion kroner. Start-up was approved by the Norwegian Petroleum Directorate in October 2019 (OGJ Online, Oct. 2, 2019). Aker BP Chief Executive Officer Karl Johnny said the project was delivered ahead of schedule and within budget.
Tied to Valhall field center, the facility is an unmanned with 12 well slots.
Reserves are estimated at 9.6 million standard cu m of oil equivalent (60 million bbl). The estimate is a median value, the NPD has said, and indicates some uncertainty regarding how much can be recovered.
Valhall produces oil from chalk in the Upper Cretaceous Hod and Tor formations. Reservoir depth is 2,400 m. The Tor formation chalk is fine-grained and has good reservoir quality. Considerable fracturing allows oil and water to flow more easily than in the underlying Hod formation. Oil and natural gas liquids are routed via pipeline to Ekofisk field and further to Teesside. Gas is sent via Norpipe to Emden in Germany.
“Valhall Flank West is an important contribution to achieving our ambition for Valhall. The plan calls for the field to contribute close to 80 million barrels of oil equivalent to Valhall’s production,” said Kjetel Digre, senior vice-president operations and asset development, Aker BP.
The plan is to drill nine wells, but the option of drilling even more is being considered.
“We have started removing old platforms from the field [center], we are investing in new wells, we are plugging old wells and we are actively seeking new business opportunities in the area,” Digre said. Valhall Flank West on stream is another step towards achieving another billion barrels from Valhall, he said.
Aker BP is operator of Valhall with 90%. Pandion Energy AS holds the remaining interest.
PROCESSING Quick Takes
CKPC lets contract for Alberta complex
Canada Kuwait Petrochemical Corp. (CKPC), a joint venture of Pembina Pipeline Corp., Calgary, and Petrochemical Industries Co. KSC (PIC) of Kuwait, has let a contract to Heartland Canada Partners—a 50-50 partnership between Fluor Canada Ltd. and Kiewit Construction Services ULC—to provide engineering, procurement, and construction (EPC) for a major unit at CKPC’s proposed 550,000-tonne/year integrated propane dehydrogenation (PDH) and polypropylene (PP) complex in Sturgeon County, Alta. (OGJ Online, May 16, 2017).
HCP’s scope of work on the project will include delivery of EPC services for construction of the complex’s PDH unit, Pembina said.
While Pembina did not disclose a specific value of the lump-sum EPC contract, the operator did confirm that the contract secures about 60% of CKPC’s entire cost of the previously projected $4.5-billion PDH-PP complex.
With the EPC contract for the PDH unit providing 60% cost certainty for the project, Pembina also confirmed it has revised its proportionate share of the capital cost of the PDH-PP complex—including its 100% share of directly-owned supporting facilities—to $2.7 billion from its earlier estimated $2.5-billion net investment in February 2019.
The revised capital cost estimate, however, will not affect Pembina’s previously announced 2020 capital budget, the operator said, adding that the contractor selection process for the complex’s PP unit remains ongoing.
Pembina said CKPC now expects the PDH-PP complex to enter commercial service during second-half 2023.
Once completed, the proposed complex will consume 23,000 b/d of Alberta-produced propane sourced from Pembina’s Redwater fractionation complex as well as other regional facilities, Pembina said in a February 2019 presentation to investors.
CKPC previously let a contract to Honeywell UOP LLC to license its proprietary C3 Oleflex technology for the complex’s production of polymer-grade PP (OGJ Online, June 11, 2017).
CKPC also awarded Jacobs Engineering Group Inc., Dallas, a contract to provide front-end engineering design services for the complex (OGJ Online, Dec. 5, 2017).
ADNOC, RIL weigh joint petrochemicals project
Abu Dhabi National Oil Co. (ADNOC) has signed a framework agreement with Reliance Industries Ltd. (RIL) of India to explore development of an ethylene dichloride (EDC) plant in Ruwais, Abu Dhabi, UAE.
As part of the agreement, ADNOC and RIL will evaluate the potential creation of a plant that manufactures EDC adjacent to ADNOC’s integrated refining and petrochemical site in Ruwais and strengthen the companies’ existing relationship supporting future collaboration in petrochemicals, ADNOC said.
ADNOC would supply ethylene to the potential joint venture and provide access to infrastructure at Ruwais, while RIL will deliver operational expertise and entry to the large and growing Indian vinyls market, in which it is a key participant, according to ADNOC.
EDC is a basic building-block for manufacture of PVC, a polymer product in increasingly higher demand globally. PVC plays a critical role in the housing and agriculture sectors, and demand for PVC, particularly in the Indian vinyls market, is slated for strong growth.
Further details regarding the EDC project, including a timeframe, were not disclosed.
Malaysia due grassroots refinery, storage terminal
State-owned Sabah Oil & Gas Development Corp. Sdn. Bhd. (SOGDC) has signed a heads of agreement with Petroventure Energy Sdn. Bhd. (PESB) for construction of a proposed petroleum oil storage and refinery in Sipitang Oil & Gas Industrial Park (SOGIP) in the Malaysian state of Sabah, on the northern portion of Borneo.
As part of the HOA, signed on Dec. 13, 2019, SOGDC (formerly Sipitang Oil & Gas Development Corp. Sdn. Bhd.) and PESB will explore the possibility of building the oil storage and refinery, which would require a total investment of about $2.3 billion, SOGDC said in posts to its official Twitter and Facebook accounts.
If approved, the project, upon start-up, would generate about 3500 job opportunities for the region, SOGDC said.
While further details regarding the proposed storage and refining complex could not be officially confirmed, local media out of Sabah reported the refinery would have a nameplate crude processing capacity of about 70,300 b/d for production of gasoline and diesel. The storage terminal would have a capacity to house 2 million cu tonnes of oil.
The entire project would take about 3-5 years to complete, according to local media reports.
TRANSPORTATION Quick Takes
Nigeria LNG partners sanction Train 7
Nigeria LNG Ltd. (NLNG) partners made a final investment decision (FID) to expand NLNG’s 6-train LNG plant at Finima on Bonny Island, Nigeria (OGJ Online, Aug. 2, 2004). The brownfield development, which is expected to start-up in 2024, will increase the annual production capacity to more than 30 million tonnes of LNG per year from the current 22.5 million tonnes/year, Nigerian National Petroleum Corp. (NNPC) reported Dec. 27.
The expansion adds 7.6 million tonnes/year of LNG—4.2 million tonnes/year from a new liquefaction train (Train 7), and 3.4 million tonnes/year from the debottlenecking of existing trains.
NLNG is a Nigerian joint venture of NNPC 49%, Shell 25.6%, Total 15%, and ENI (NA) NV 10.4%.
In operation since 1999, NLNG has delivered over 4,700 LNG cargoes around the world.
FERC certificate progresses Adelphia Gateway project
Adelphia Gateway LLC received a certificate of public convenience and necessity from the US Federal Energy Regulatory Commission authorizing the Adelphia Gateway natural gas project designed to serve the greater Philadelphia region. The 18-in. pipeline covers portions of Delaware, Chester, Bucks, Montgomery, and Northampton counties in Pennsylvania. The company expects work to be complete and the project to be placed into service in 2020.
The project will convert 50 miles of an existing 84-mile pipeline from oil to natural gas (OGJ, Nov. 4, 2019, p.50). The northern 34 miles of the pipeline extending from western Bucks County to the Martins Creek terminal in Northampton County were converted to deliver natural gas in 1996. After the purchase of Interstate Energy Co. and the existing pipeline from Talen Generation LLC are finalized, the northern zone will continue to operate to serve two natural gas-fired generation facilities in Lower Mount Bethel Township, PA. Once all the necessary regulatory approvals are obtained, work to convert the lower 50 miles of the pipeline from oil to natural gas will begin.
Upon completion of conversion and enhancements, the repurposed southern portion of the pipeline will be able to transport 250,000 dekatherms/day (91 million dekatherms/year) into the greater Philadelphia area.
KKR to acquire stake in Coastal GasLink pipeline
Investment firm KKR, along with Alberta Investment Management Corp., signed an agreement to acquire a 65% equity interest in the Coastal GasLink natural gas pipeline project from TC Energy Corp., Calgary.
TC Energy will hold a 35% limited partnership equity interest in Coastal GasLink and will be contracted to construct and operate the pipeline.
TC Energy expects Coastal GasLink to enter into a secured project financing construction credit facility with a syndicate of banks to fund up to 80% of the project during construction. Both transactions are expected to close in the first half of 2020, subject to regulatory approvals and consents, including the consent of LNG Canada—a joint venture of Royal Dutch Shell PLC, PetroChina Co. Ltd., Mitsubishi Corp., and Korea Gas Corp.
Coastal GasLink involves the estimated $6.6 billion (Can.) construction of 670 km of natural gas pipeline and associated facilities. Once completed, the pipeline will have an initial capacity of 2.1 bcfd and connect Western Canadian Sedimentary basin natural gas supply from the Dawson Creek, BC, area to the LNG Canada liquefaction and export facility being constructed in Kitimat, BC.
Construction activities for the natural gas pipeline, which is backed by 25-year transportation service agreements with the five LNG Canada owners, has begun.
Outrigger advances Williston gathering system
Denver-based Outrigger Energy II LLC has entered a long-term natural gas gathering and processing agreement with ExxonMobil Corp. subsidiary XTO Energy Inc. to service XTO’s production in Williams County, ND.
To accommodate the agreement, Outrigger will build, own, and operate a 70-mile, 20- and 24-in. diameter, high-pressure, rich gas pipeline starting in eastern Williams County that will terminate west of Williston, ND, at Outrigger’s planned 250-MMcfd cryogenic gas processing plant, Outrigger said on Jan. 7.
The high-efficiency gas plant will feature ethane-recovery and rejection capabilities providing direct market access to the TC Pipelines LP-Oneok Inc. jointly owned Northern Border Pipeline system for residue gas and to Oneok’s NGL pipeline system for NGLs.
Outrigger said it may add future NGL fractionation facilities to provide finished NGL products for local markets. Plans are already under way to expand the Williams County gas plant by additional 200 MMcfd for a total gas processing capacity of 450 MMcfd.
Currently under construction, Outrigger’s Williams County rich gas pipeline and associated gas processing plant are scheduled to become operational in December 2020. A timeframe for the proposed expansion of the gas plant was not disclosed.
Alongside routing of the gathering line providing other Williston basin operators access to additional gathering and cryogenic processing capacity, Outrigger’s additional midstream capacity for gas production north of the Missouri River also will enable North Dakota to advance its goal of minimizing gas flaring in the basin, Dave Keanini, Outrigger’s chief executive officer, said.
XTO holds more than 479,000 acres in North Dakota, according to the company’s website.
