GENERAL INTEREST Quick Takes
Harbour Energy advances Viking CCS project
Harbour Energy’s Viking CCS CO2 transport and storage network has begun the statutory consultation phase of the development consent order for its 55-km onshore pipeline. The company has already been consulting with local communities, with the newly launched process intended to provide more detailed information regarding the pipeline and its route.
Viking CCS plans to submit a planning application for the onshore pipeline, which will reuse existing line, during first-half 2023. The next major milestone would be the start of construction in 2025, which would support completion and startup as early as 2027.
The system will move captured CO2 from the Immingham, North East Lincolnshire, UK, industrial area to the site of the former Theddlethorpe gas terminal (TGT) on the Lincolnshire coast. From TGT, the CO2 will be transported 140 km to the depleted Viking gas fields, 9,000 ft beneath the Southern North Sea seabed, for permanent storage.
Harbour describes the onshore pipeline as a key component in the infrastructure needed to decarbonize and rejuvenate the industries of the Humber Esturary, targeting a 10-million tonne/year reduction in emissions by 2030. The UK government has granted Viking CCS nationally significant infrastructure project (NSIP) status and both it and Harbour expect it to make a material contribution to the UK’s net-zero emissions targets.
UK Oil and Gas Authority last year awarded a license to Harbour for what was then called V Net Zero.
Phillips 66 Co. is developing what could become the first-ever industrial-scale carbon capture project executed within a refinery at its affiliate’s 221,000 b/d Humber plant, with front-end engineering and design work awarded to Worley Ltd. expected to be complete by end-2023.
Crescent Point acquires Kaybob Duvernay assets
Crescent Point Energy Corp. has agreed to acquire additional Kaybob Duvernay assets in Canada from Paramount Resources Ltd. for $375 million cash.
The assets include about 130 net drilling locations across nearly 65,000 net acres of crown land (90% average working interest) with no expiries, the company said in a release Dec. 9. The acquired assets currently produce over 4,000 boe/d (50% liquids) and include a gas plant, associated pipelines, water infrastructure, and seismic data.
With the acquisition, the company increases its drilling inventory in the play to over 20 years based on current production and increases its land position to about 400,000 net acres, said Craig Bryksa, Crescent Point president and chief executive officer.
The company plans to grow its Kaybob Duvernay asset within its 5-year plan to over 55,000 boe/d from about 35,000 boe/d in 2022.
In 2024, Crescent Point intends to add a second rig in the Kaybob Duvernay as part of its development program. The company is currently drilling its seventh pad in the play and expects to bring its sixth fully operated pad on-stream in early 2023. The company’s fourth and fifth fully operated multi-well pads were recently brought on-stream and are generating strong initial production results that are in-line with, or ahead of, its internal type wells. Average IP rates for the fourth and fifth pads are about 785 boe/d per well (IP90) (75% liquids) and about 950 boe/d per well (IP30) (65% liquids), respectively.
Crescent Point’s 2023 annual average production guidance is now 138,000-142,000 boe/d, an increase of 4,000 boe/d, with development capital expenditures unchanged at $1-1.1 billion.
The acquisition is expected to close in January 2023.
Arena Energy adds to Gulf of Mexico Shelf properties
Arena Energy LLC closed a deal to acquire seven blocks and 12 platforms in the Gulf of Mexico from GOM Shelf LLC.
The acquisition includes net production of about 2,000 boe/d in fields with historically low decline rates and includes a majority interest in two large fields in the shallow water US Gulf of Mexico in Eugene Island 330 and South Marsh 128, the company said in a release Dec. 12.
The acquired assets “have significant operating synergies with existing Arena assets with optionality to restore and increase production and includes four platforms on lease blocks that Arena was recently awarded in Lease Sale 257,” the company continued. A purchase price was not disclosed.
Earlier in December, Arena Energy noted its award of leases in the US Gulf of Mexico by the Bureau of Ocean Energy Management (BOEM) in Lease Sale 257, adding over 50,000 acres to its existing Gulf of Mexico Shelf acreage.
BOEM conducted the sale in November 2021, but it was subsequently vacated by a federal judge in January 2022. The Inflation Reduction Act of 2022, signed into law by President Biden in August, required reinstatement of the sale and the leases were finally awarded in October 2022.
Arena was the successful bidder on eleven leases in water depths of 30-283 ft in Eugene Island, South Pelto, and West Delta in the Gulf of Mexico off the coast of Louisiana. Arena paid $3.8 million in lease bonuses to the federal government for the leases.
Arena Energy finds offshore oil and gas prospects which are drilled and operated by affiliate company Arena Offshore.
Exploration & Development Quick Takes
Saudi Aramco makes two new unconventional gas discoveries
Saudi Arabian Oil Co. (Aramco) has discovered two new unconventional natural gas fields, Awtad and Al Dahna, in the country’s eastern region.
Awtad is southwest of Ghawar field, 142 km southwest of Al Hofuf. Gas flowed from the Awtad-108001 well at a rate of 10 MMscfd, with 740 b/d of condensate. Awtad-100921 produced 16.9 MMscfd of gas and 165 b/d of condensate.
Al Dahna is 230 km southwest of Dhahran. Gas flowed from Al Dahna-4 well at 8.1 MMscfd, and from Al Dahna-370100 at 17.5 MMscfd, along with 362 b/d of condensate.
Prince Abdulaziz bin Salman bin Abdulaziz, Saudi minister of energy, said the discoveries would help the country realize the objectives of its liquid-fuel displacement program. Aramco wants to boost gas production by more than 50% by 2030 (OGJ Online, Apr. 4, 2022).
Wintershall submits PDO for Dvalin North gas field
Wintershall Dea is advancing plans to increase gas exports to Europe through development of Dvalin North gas field in the Norwegian Sea.
On Dec. 13, the operator submitted to the Norwegian Ministry of Petroleum and Energy a plan for development and operation (PDO) for the field—the largest discovery in Norway in 2021 and the company’s fifth operated subsea field in Norway.
As a tie-back to the Heidrun platform via Wintershall-operated Dvalin field, Dvalin North will use existing infrastructure, ensuring future production volumes with low carbon intensity, the company said in a release Dec. 13.
The Dvalin North partnership expects to invest about 8 billion NOK to develop the discovery, drilling three producing wells from a single subsea template 10 km north of existing Dvalin field, which is expected to start production in the coming months. Dvalin North is scheduled for planned start-up late 2026.
Dvalin North field lies 200 km off the coast of Northern Norway, west of Sandnessjøen, at a water depth of 420 m. It is estimated to contain 84 MMboe and the gas will be exported via the Polarled pipeline to Nyhamna near Kristiansund in Norway.
Wintershall Dea is operator of the field with a 55% share. Petoro has 35% and Sval Energi has 10%.
Petronas discovers oil offshore Sarawak
Petronas Carigali Sdn Bhd discovered oil at the Nahara-1 well in Block SK306 in the shallow waters of Balingian Province about 150 km from Bintulu off the coast of Sarawak, alaysia.
Nahara-1 was drilled to a total depth of 2,468 m and encountered hydrocarbon in the Late Oligocene to Middle Miocene aged sedimentary sequences. Light oil with minimal contaminants was also found after production testing was conducted on the well.
Petronas is operator of the block with 100% interest.
Novatek discovers condensate in Bukharinskiy license area
Arctic LNG 1, a wholly owned subsidiary of PAO NOVATEK, completed testing of the first prospecting well within the Bukharinskiy license area on the Gydan Peninsula in Russia’s Yamal-Nenets Autonomous Region. The well discovered a new gas condensate field estimated to hold recoverable reserves of 52 billion cu m of natural gas and 2 million tons of liquids under the Russian reserve reporting standards.
The license area is partially in the shallow waters of the Ob and Taz bays and lies near Artic LNG 1’s Geofizicheskiy and Trekhbugorniy license areas and Soletsko-Khanaveyskoye field (OGJ Online, April 28, 2020). With this discovery, NOVATEK will expand its resource base in Gydan Peninsula with the view to putting the field into production.
Drilling & Production Quick Takes
Equinor’s Askeladd brings more feed gas to Hammerfest LNG
Equinor Energy AS has brought Askeladd field onstream, helping to extend plateau production from the Hammerfest LNG plant (HLNG) on Melkøya Island in northern Norway by up to 3 years, the company said in a release Dec. 12.
Phase 1 of Askeladd will bring 18 billion cu m of gas and 2 million cu m of condensate to the European market via HLNG.
Askeladd is a satellite field of Snøhvit field in the Barents Sea and developed with three wells via two subsea templates and tied in to Snøhvit infrastructure and HLNG.
During normal production, the plant delivers 18.4 million standard cu m/d of gas, about 5% of all Norwegian gas exports.
Askeladd Phase 1 was originally completed in 2020, but start-up had to wait until the Melkøya plant resumed operations after the fire the same year. The operator restarted production at the plant earlier this year (OGJ Online, June 2, 2022).
Askeladd is the first of several projects in the further development of Snøhvit field and the infrastructure around HLNG. Next up is Askeladd West with two new wells tied back to existing infrastructure, before further development continues with onshore compression and electrification through the Snøhvit Future project.
The Snøhvit licensees are Equinor Energy ASA (36.79%), Petoro AS (30%), TotalEnergies EP Norge AS (18.4%),
Neptune Energy Norge AS (12%), and Wintershall DEA Norge AS (2.81%).
TotalEnergies to drill Block 9 offshore Lebanon
TotalEnergies SE will explore Block 9 offshore Lebanon with a well expected to spud in 2023.
Call for tenders to secure the drilling rig has been launched with selection expected in first-quarter 2023. Pre-orders have been placed with suppliers for required equipment. In parallel, offshore resources are being mobilized to contribute to environmental studies which will be finalized by the end of June 2023, the company said.
The decision to move ahead with drilling comes after a maritime boundary decision was reached between Israel and Lebanon on Oct. 27, 2022 (OGJ Online, Nov. 15, 2022).
TotalEnergies is operator of Block 9 (60%) with partner ENI SPA (40%).
Equinor granted consent to drill two North Sea prospects
Equinor Energy AS has been granted consent by the Petroleum Safety Authority Norway to drill in the North Sea.
The operator plans to drill exploration well 35/10-9 (Heisenberg prospect) in Block 35/10 in production license 827 S in water depth of 368 m using the Deepsea Stavanger semi-submersible mobile drilling unit. Equinor is operator of the license with 51% interest. DNO Norge AS holds the remaining 49%.
Separately, in Block 34/6, the company expects to drill 34/6-6 S and 34/6-6 A (Angulata Brent prospect) in production license 554 in 374 m water depth using the Transocean Spitsbergen semi-submersible drilling rig. Equinor is operator of the license with 40% interest. Partners are Aker BP ASA (30%) and Vår Energi ASA (30%).
Azule Energy advances FPSO agreement for Agogo
Azule Energy has entered into an agreement with Yinson Azalea Production Pte Ltd. activities related to the provision, operation, and maintenance of an FPSO for the Agogo integrated west hub development project offshore Angola, Yinson Production said in a Dec. 5 release.
The agreement outlines both parties’ interests in beginning preliminary work to meet the project schedule, while finalizing firm contracts for the project. The term is 60 days with an aggregate value of about $218 million.
Azule Energy is a 50-50 joint venture between bp PLC and Eni SPA. The company holds 2 billion boe net resources in Angola and has stakes in 16 licenses, of which 6 are exploration blocks. Agogo field is in Block 15/06, about 180 km from the coast in 1,700 m of water.
PROCESSING Quick Takes
Sinopec, INEOS form JV for Tianjin petrochemicals complex
China Petroleum & Chemical Corp. (Sinopec) and INEOS Group have signed a joint-venture agreement under which the companies will partner on Sinopec’s grassroots 1.2-million tonne/year (tpy) ethane cracker complex currently under construction in Tianjin Province, China.
As part of the Dec. 7 agreement, Sinopec and INEOS will each hold a 50% ownership interest in the Tianjin Nangang Ethlene Project (TNEP) that, in addition to the new ethane cracker, will house 12 other downstream derivatives plants, including a 300,000-tpy acrylonitrile butadiene styrene (ABS) and 500,000-tpy high-density polyethylene plant (HDPE), both of which will based on INEOS’ proprietary Terluran ABS technology, INEOS said.
Sinopec and INEOS said they expect to commission TNEP’s ethane cracker as well as its ABS and HDPE plants by yearend 2023.
Formation of TNEP partnership marks the fourth 50-50 JV agreement between Sinopec and INEOS in 2022 following previous agreements signed in July, when the companies confirmed they would collaborate on three JV projects worth an estimated $7 billion and involving a combined 7 million tpy of both existing and future petrochemical production in China as part of growing partnership aimed at helping the country meet rising demand in its domestic market.
As part of one deal, INEOS agreed to acquire 50% of Sinopec subsidiary SECCO Petrochemical Co. Ltd., which produces 4.2 million tpy of olefins, polymers, and other derivatives—including ethylene, propylene, polyethylene, polypropylene, styrene, polystyrene, acrylonitrile, butadiene, benzene, and toluene—across a series of plants at its 200-hectare complex inside the Shanghai Chemical Industry Park, a 29.4-sq km national professional development zone specializing in petrochemicals situated at North Shore, Hangzhou Bay.
Under a second agreement, INEOS and Sinopec will form a new 50-50 JV to focus on increasing China’s production capacity of ABS by up to 1.2 million tpy via construction of two new Terluran-based 300,000-tpy ABS plants—one at TNEP, and the second at a location to be later decided.
The planned ABS JV will also become responsible for operation of INEOS Styrolution Group GmbH’s 600,000-tpy ABS plant currently under construction in Ningbo upon the site’s scheduled commissioning by yearend 2023.
Under a final agreement, INEOS and Sinopec propose establishing a third JV that will oversee construction and operation of TNEP’s 500,000-tpy HDPE plant in Tianjin by yearend 2023, as well as at least two additional HDPE plants in China sometime in the future.
Aramco expands downstream relationships in China
Saudi Aramco and Shandong Energy Group Co. Ltd. are exploring opportunities to collaborate on integrated refining and petrochemical projects in Shandong Province, China.
The collaboration agreement comes as part of a memorandum of understanding (MOU) between the companies signed on Dec. 9, which includes a potential crude oil supply agreement and chemicals products offtake agreement, Aramco said.
In line with Aramco’s goal to help build a thriving downstream sector in Shandong, the MOU extends to cooperation across technologies related to hydrogen, renewables, and carbon capture and storage (CCS), the companies said.
Alongside underlying the importance of its growing collaboration with Chinese companies, Aramco said planned collaboration with Shandong Energy also complements Aramco’s efforts to support demand for energy, petrochemicals, and nonmetallics in China as the Saudi Arabian operator seeks to expand its liquids to chemicals capacity to up to 4 million b/d by 2030.
“We share a lot of common interests, complementary strategies with expansive scope for cooperation, especially in oil and gas resources development and integrated refining and petrochemicals development along the whole industrial chain,” said Li Wei, Shandong Energy’s chairman.
The companies have yet to reveal details regarding the specific integrated refining and petrochemical projects or hydrogen, renewables, and CCS technologies involved under the MOU.
TRANSPORTATION Quick Takes
Sempra, ENGIE sign Port Arthur LNG offtake agreement
Sempra Infrastructure, a subsidiary of Sempra, has entered into a 15-year agreement with ENGIE SA for supply of 0.875 million tonnes/year (tpy) of LNG from the 13.5-million tpy Phase 1 of Sempra’s Port Arthur LNG project under development in Jefferson County, Tex. The LNG will be supplied free-on-board and sourced from natural gas producers whose gas has been certified by an independent third party in accordance with ESG performance criteria, Sempra said in a release Dec. 6.
The agreement also provides a framework to explore ways to lower the carbon intensity of LNG produced from the project through GHG emission reduction, mitigation strategies, and a continuous improvement approach, the company said.
Sempra earlier this year finalized an engineering, procurement, and construction contract with Bechtel Energy for Phase 1 and recently entered into agreements with ConocoPhillips and INEOS for the sale of 5 million tpy and 1.4 million tpy, respectively. The company has targeted a first-quarter 2023 final investment decision, with first cargo deliveries expected in 2027.
Port Arthur LNG Phase 1 is permitted and expected to include two 6.75-million tpy liquefaction trains, LNG storage tanks, and associated infrastructure. Port Arthur LNG Phase 2 will be similarly sized, with Sempra actively marketing its output.
Development of the Port Arthur LNG project is contingent upon completing the required commercial agreements, securing all necessary permits, obtaining financing, and reaching a final investment decision, among other factors.
TC Energy: No timeline yet for Keystone restart
TC Energy Corp. said Dec. 12 that it was continuing response and recovery efforts following an estimated 14,000-bbl crude oil spill in Washington County, Kan., from its Keystone pipeline but did not have a timeline for the 610,000-b/d system’s restart. The company described the spill as contained and said that multiple vacuum trucks and booms are onsite as part of recovering the oil.
TC Energy is conducting repair planning and investigation of the leak’s cause as part of unified command with the US Environmental Protection Agency in collaboration with the Pipeline and Hazardous Materials Safety Association and the Kansas Department of Health and Environment.
The 1,230-km Keystone system carries crude oil from Hardisty, Alta., to refiners in the US Midwest and Gulf Coast. It splits at Steele City, Neb., with one branch running east through Kansas and Missouri to delivery points at Wood River and Patoka, Ill., and the other south to delivery points at Cushing, Okla., and Houston and Port Arthur, Tex.
CFEnergia considering building 4.5-million tpy Gulf Coast LNG plant
CFEnergia SA de CV has solicited expressions of interest in building a 4.5-million tonne/year LNG plant on Mexico’s Gulf Coast at Coatzacoalcos port, Veracruz state. CFE would use natural gas imported under contract via pipeline from the US to feed the plant, with interested parties expected to build, operate, and maintain it for 20 years.
TC Energy Corp. earlier this year awarded Allseas Group SA a contract to build a 1.3-bcfd subsea pipeline from Tuxpan, Mexico, to Coatzacoalcos and Dos Bocas (OGJ Online, Sept. 28, 2022).
In addition to supplying the feedgas, CFE said that it would provide the land on which the plant will be sited and assist with project permitting. The awarded participant, in addition to covering the price of the natural gas and its transportation by pipeline, will market the LNG produced and grant CFEnergia a consideration based on profits derived from sale of the LNG.
Companies interested in bidding must have at least 75% Mexican equity.
CFEnergia is the gas-trading arm of Mexico’s public utility, Comisión Federal de Electricidad.
