GENERAL INTEREST Quick Takes
ADNOC, TAQA form water supply JV for Abu Dhabi fields
ADNOC and Abu Dhabi National Energy Co. PJSC (TAQA) plan to invest up to $2.4 billion for a joint project to provide sustainable water supply for ADNOC’s onshore operations in Abu Dhabi, UAE.
The greenfield project will comprise a centralized seawater treatment plant and transportation network for operations at Bab and Bu Hasa fields with a goal to deliver more than 110 million imperial gal/d of nano filtered seawater through a water transmission pipeline of 75 km, more than 230 km of distribution pipelines, and two pumping stations.
The project would replace the current high-salinity, deep aquifer water systems at the fields, thereby reducing water injection related energy consumption by up to 30%, the companies said in a joint release May 24.
The project will be connected to the grid and will receive 100% of its power from ‘clean energy sources,’ the companies continued.
ADNOC and TAQA will jointly hold a 51% majority stake (25.5% each). The remaining 49% will be held by a consortium of Orascom Construction and Metito. The consortium will arrange project financing for the construction phase and develop the project under a build, own, operate, and transfer model, with the full project being returned to ADNOC after 30 years of operation.
Grupo Carso acquires stake in Zama field from Talos Energy
Zamajal SA de CV, a wholly owned subsidiary of Grupo Carso, Mexico City, has agreed to acquire a 49.9% interest in Talos Energy Inc.’s Mexican subsidiary, which holds Talos’s 17.4% stake in Petróleos Mexicanos’s (Pemex)-operated Zama field, for $124.75 million.
Talos will remain the controlling shareholder of Talos Mexico.
According to Talos, $74.85 million will be paid at closing, with the remaining $49.90 million due at first production.
The Zama Unit development plan was submitted to Mexico’s National Commission of Hydrocarbons for formal approval earlier this year, and an integrated project team of Zama Unit holders was established to manage development and operation of Zama going forward (OGJ Online, Apr. 3, 2023).
Unitization of Zama was required after determination that the field lies within both the Talos-operated Block 7 and the adjacent AE-0152-Uchukil Asignación in the Cuencas del Sureste, in the Bay of Campeche in Mexico, operated by Pemex, that provides for joint development of the entire reservoir instead of each party developing its own block.
Talos, together with Pemex, Wintershall, and Harbour, will co-lead different work groups. Talos and Pemex will co-lead the planning, drilling, construction, and completion of all Zama wells and co-lead the planning, execution, and delivery of Zama’s offshore infrastructure. Talos, Pemex, and Wintershall will co-lead the project management office.
Grupo Carso’s investment deal with Talos is expected to close in this year’s third-quarter, subject to approval by Mexico’s Federal Economic Competition Commission (COFECE).
Tullow partners withdraw from South Lokichar basin
Tullow Kenya BV will become sole owner of certain blocks onshore Kenya as minority partners withdraw.
Africa Oil Corp. and Total SE informed Tullow of their withdrawal from Blocks 10BB, 13T, and 10BA in South Lokichar basin near Lake Turkanaby, Kenya. Tullow’s share in the project will increase to 100% from 50%.
Africa Oil submitted notices to Ministry of Energy and Petroleum requesting the government’s consent to transfer all rights and obligations under the PSCs to its remaining joint venture partner. Africa Oil president and chief executive officer Keith Hill said the company’s decision will allow Africa Oil to focus on other production and exploration opportunities, including in Namibia’s Orange basin where the offshore Venus discovery is under appraisal.
Tullow said progress in Kenya continues. The updated field development plan was submitted in March to Kenyan regulator Energy and Petroleum Regulatory Authority and is now under review.
Following partner withdrawals, Tullow’s net 2C contingent resources in the project are expected to increase to 461 MMboe from 231 MMboe, and the company’s net capital expenditure guidance in Kenya for 2023 will increase to $15 million from about $10 million.
Tullow is continuing farm-out discussions with companies with the aim of securing a partnership this year.
Exploration & Development Quick Takes
Aker BP makes Norwegian Sea discovery
Aker BP ASA made what it calls a ‘significant’ oil discovery in the Øst Frigg Beta/Epsilon exploration well within production licenses (PL) 873 and 442 in the Yggdrasil area of the Norwegian North Sea.
Preliminary estimates indicate a gross recoverable volume of 40-90 MMboe, surpassing pre-drill estimate of 18-45 MMboe. The discovery enhances the resource base for the Yggdrasil development, which was previously stated at 650 MMboe (gross), the operator said.
The plan for development and operations was submitted to Norwegian authorities in December 2022, with production scheduled to begin in 2027.
Aker BP is operator of PL 873 with 47.7% interest. Partners are Equinor Energy AS (40%) and PGNiG Upstream Norway AS (12.3%).
Aker BP is operator of PL 442 with 87.7% interest. PGNiG Upstream Norway holds the remaining 12.3%.
Shell lets contract for Dover development
Shell plc has let an integrated engineering, procurement, construction, and installation contract to TechnipFMC for the operator’s Dover development in the Gulf of Mexico.
TechnipFMC will supply the subsea tree systems in addition to the engineering, procurement, construction, and installation of the umbilical, riser, and flowline systems in a contract valued $75-250 million, according to the service provider’s May 25 release.
Dover will tie back to the Appomattox platform in Mississippi Canyon, 170 miles southeast of New Orleans, where TechnipFMC previously supplied and installed the subsea production systems (OGJ Online, Mar. 16, 2023).
Dover will have two production wells producing through a 17.5-mile flowline and riser and is expected to produce up to 21,000 bo/d at peak rates.
Shell has 100% working interest in Dover and is operator at Appomattox with a 79% interest. Chinese National Offshore Oil Corp. (CNOOC) holds the remaining 21%.
ONGC discovers oil offshore Mumbai
India’s Oil and Natural Gas Corp. Ltd. (ONGC) is assessing two discoveries made offshore Mumbai in the Arabian Sea.
The first discovery is in the AMRIT MB-OSHP-2017/1 open acreage licensing policy (OALP) block. The second is in Moonga MBS182HDA-1(MBS182HDA-A) OALP exploration block.
ONGC has notified the Directorate General of Hydrocarbons and the Ministry of Petroleum and Natural Gas about the discoveries.
Drilling & Production Quick Takes
Johan Sverdrup partners aim for production increase
Equinor ASA and Johan Sverdrup field partners confirmed through a capacity test that the North Sea field can produce up to 755,000 b/d of oil.
The Utsirahøyden area field, 160 km west of Stavanger in depth of 110-120 m, reached the record-high production level—equal to 6-7% of the daily European oil consumption—this week, the operator said in a release May 23.
The process capacity test “confirms technically very robust facilities and was safely performed with no unwanted incidents,” said Marianne Bjelland, Equinor’s vice-president, exploration and production for Johan Sverdrup.
Equinor and partners Aker BP, Petoro, and TotalEnergies aim to maintain oil production from the field up towards the record-level going forward, the operator said.
The 200 sq-km field, which also produces 31,500 boe/d of gas, produces some of the lowest CO2 emissions of any oil field, 80-90% lower than the global average, Equinor said.
Johan Sverdrup has reserves of 2.7 billion boe. Phase one opened in October 2019, while phase two started producing in December 2022. The field was originally expected to produce 720,000 b/d of oil at plateau, about a fourth of Norwegian oil production at the current level.
Neptune starts gas production at Adorf Z17 well
Neptune Energy started production from the Adorf Z17 gas well in Adorf Carboniferous gas field, Georgsdorf, northwestern Germany.
The well is expected to increase Neptune’s production from the Adorf license by 1,800 boe/d to about 6,300 boe/d. Construction of a dedicated processing plant at the site was completed earlier this year.
Adorf gas field was discovered in 2020 and the first well, Adorf Z15, was brought into production in October the same year. A second well, Adorf Z16, increased Neptune’s production from the license to around 4,500 boe/d at the beginning of 2022. Drilling of a fourth well, Adorf Z18, reached a final depth of 4,773 m in April this year and is due to begin production in third-quarter 2023 (OGJ Online, Jan. 24, 2023).
Neptune Energy is operator and 100% owner of the field.
DNO Norge to drill exploration well near Kveikje
DNO Norge AS will drill the Lotus (Kjøttkake) exploration well in production license (PL) 1182S, 4 km southeast of the recent Kveikje discovery in the Norwegian North Sea, according to a May 30 release by partner Longboat Energy PLC.
The license comprises Paleocene injectite sandstones, characterized by excellent reservoir properties, and is supported by seismic amplitudes. Longboat’s Lotus prospect has been named Kjøttkake by DNO Norge and will be drilled using the Deepsea Yantai semi-submersible drilling rig. The well is expected to spud during third-quarter 2024.
If successful, Kjøttkake/Lotus is likely to form part of an area cluster development together with Kveikje and several other recent discoveries in the area through infrastructure associated with nearby Troll field, the company indicated.
Kjøttkake/Lotus contains gross mean prospective resources of 27 MMboe with further potential upside estimated by Longboat of 44 MMboe. The chance of success is 56% with the key risk being hydrocarbon retention.
DNO Norge AS is operator at PL 1182S (40%) with partners Longboat Energy (30%) and Aker BP ASA (30%).
PROCESSING Quick Takes
LyondellBasell delays refining business exit
LyondellBasell, Houston, plans to delay its refining business exit from year-end 2023 to no later than the end of first-quarter 2025.
In April 2022, the company said it would cease operation of subsidiary Houston Refining LP’s 268,000-b/d full-conversion refinery no later than Dec. 31 of this year (OGJ Online, Apr. 22, 2022). The refinery, on the Houston Ship Channel, currently transforms crude oil into transportation fuels and other products including lubricants, chemical intermediates, and petroleum coke.
Now, “favorable inspections and consistent performance” have given the company “confidence to continue safe and reliable operations” as it continues to develop future options for the 700-acre site, enabling “a smoother transition between the shutdown and the implementation of the retrofitting and circular projects,” LyondellBasell said in a release May 31.
Options being evaluated include recycled and renewable-based feedstocks and green and blue hydrogen. The growth projects under development would connect to existing assets in the Houston area and use existing infrastructure on the refining site including hydrotreaters, pipelines, tanks, utilities, buildings, and laboratories, the company said.
The company anticipates moderate maintenance spend to support the extension in 2023 and 2024 but says it “remains committed” to ceasing operation of its oil refining business.
Petro Rabigh refinery to feed proposed needle coke, graphite complex
Privately held TAQAT Development Co. has let a contract to Chevron Lummus Global (CLG) to deliver technology licensing and engineering services for a proposed grassroots complex that will produce needle coke and synthetic graphite from feedstock supplied by the 400,000-b/d refinery and chemicals complex operated by Rabigh Refining & Petrochemical Co. (Petro Rabigh)—a 50-50 joint venture of Saudi Aramco and Sumitomo Chemical Co.—in the port city of Rabigh, Saudi Arabia, along the Red Sea.
As part of the contract, CLG will license the proposed 75,000-tonne/year (tpy) complex its proprietary two-step coking process to enable conversion of lower-value, heavy oil residue streams from Petro Rabigh’s refinery that would otherwise be used as fuel oil into high-quality needle coke, which in turn will be used to produce synthetic graphite, the service provider said on May 25.
Alongside technology licensing, CLG’s scope of work also covers basic design, pilot plant testing, as well as other unidentified engineering and operations support.
The service provider revealed neither the value nor duration of the license and engineering contract, which was initially signed on Feb. 14, 2023, according to a recent post by TAQAT to one of its official social media accounts.
According to TAQAT’s website, the proposed complex—or cluster—will consist of two separate installations, including a plant to be developed inside Petro Rabigh’s refinery that will use the refiner’s supply of slurry-decant oil feedstock to produce needle coke.
The cluster also is to include construction of a separate plant that will use the precursor needle coke for production of graphite anode for electric vehicle (EV) and energy storage-system batteries, TAQAT said.
While TAQAT confirmed via its website the December 2020 signing of its agreement with Petro Rabigh’s refinery for the needle coke plant’s development and associated feedstock supply, the company recently formed a joint venture with Novonix Ltd.—a Canadian-based battery technology developer and manufacturer—to develop a 30,000-tpy graphite anode materials plant in Saudia Arabia that would receive precursor needle coke, at least in part, from the proposed Petro Rabigh plant, according to a Mar. 30 release from Novonix.
TAQAT said its proposed needle coke-graphite anode project is supported by investments of the government of Saudi Arabia under its Vision 2030 goals, which aims to have EVs account for 30% of all on-road, in-kingdom vehicles by 2030.
The TAQAT (60%)-Novonix (40%) JV’s proposed graphite anode plant—plans for which must be finalized by end-March 2024 per terms of the agreement—would directly support a localized supply chain for the EV sector, the companies said.
Petro Rabigh has yet to directly disclose any official details to global media outlets regarding its role in the proposed specialty complex.
Vertex starts commercial production of renewable diesel
Vertex Energy Inc., Houston, began commercial production of renewable diesel at Vertex Refining Alabama LLC’s 75,000-b/d refining and petrochemical complex in Mobile, Ala., after completing startup procedures.
After 2 weeks of downtime related to repairs on the feedstock pumping system, repair and reinstallation operations are complete. Startup procedures were completed mid-May, and the refinery achieved initial production on May 27, the company said in a release May 31.
With a planned production capacity of 8,000-10,000 b/d, Phase 1 of the project—which reached mechanical completion on Mar. 31—began producing renewable diesel from a primary feedstock of locally sourced soybean oil, Vertex said on May 1.
TRANSPORTATION Quick Takes
EPP completes 400-MMcfd Acadian Haynesville Extension expansion
Enterprise Products Partners LP (EPP) has completed a 400-MMcfd expansion of its Acadian Haynesville Extension natural gas pipeline, increasing its capacity to 2.5 bcfd. This expansion was underwritten by long-term, take-or-pay contracts.
Enterprise’s 1.65-billion lb/year polymer-grade propylene PDH 2 plant is also scheduled for completion in second-quarter 2023 at its Mont Belvieu complex in Chambers County, Tex. S&B Engineers and Constructors Ltd. is performing engineering, procurement, and construction for the plant using Honeywell UOP technology.
The project includes a “sizeable” C3 splitter column, which S&B installed in pieces onsite using a specialized gantry crane. Other scope includes a modularized reactor section, compression equipment, multiple fired heaters, and associated infrastructure and utilities.
In second-half 2023, EPP expects to complete construction of its twelfth NGL fractionator (150,000 b/d) at Mont Belvieu, two natural gas processing plants in the Permian basin (300,000-b/d Poseidon in Midland basin and 300,000-b/d Mentone II in Delaware basin), and the first phase of its 60,000-b/d Texas Western products pipeline between Mont Belvieu and Grand Junction, Colo.
Canadian Overseas begins Wyoming gas gathering upgrade
Canadian Overseas Petroleum Ltd. has begun installation of a new high-pressure natural gas gathering system for its Barron Flats Shannon (Miscible) oil production unit (BFSU). Right-of-way was cleared and crews mobilized late-April 2023, with all of the system’s 8-in. OD pipe now delivered to site and strung along the right-of-way.
The new system’s 5 miles of pipe are routed through the field’s core, with Phase 1a using 2- and 4-in. pipe to connect seven batteries and service nine of its 34 producing wells. The current, low-pressure gas gathering system will continue to service BFSU’s remaining wells.
The system is designed to capture additional wells with increased pressures as the field miscible flood matures. Canadian Overseas is also converting certain high-productivity oil producing wells to flowing-pumping configuration in conjunction with installation of the new gathering system.
Welding began May 10, with 2,352 ft of pipe laid and welded as of May 23. Construction is expected to take 2-3 months. Work also includes upgrading well sites by installing high-pressure separators and high-pressure fire tubes for each separator.
Canadian Overseas budgeted Phase 1a at up to $4.5 million, funded by proceeds from a recent convertible bond financing. The company’s production and development operations are focused in Converse and Natrona Counties, Wyo.
Venture Global CP2 awards Phase 1 EPC contract to Worley
Venture Global CP2 LNG LLC has awarded Worley an engineering, procurement, and construction (EPC) contract for the 10-million tonne/year (tpy) Phase 1 of its 20-million tpy CP2 LNG plant in Cameron Parish, La. Worley will provide full EPC execution, including commissioning and start up.
Full notice to proceed with construction will follow Venture Global taking final investment decision on the project. The company expects to start construction in 2023, pending receipt of US Federal Energy Regulatory Commission (FERC) authorization, which is under way.
CP2 would be Venture Global’s third plant, the company targeting a second-quarter 2026 in-service date (OGJ Online, Jan. 23, 2023). The plant will use the same modular construction used at Venture Global’s 10-million tpy Calcasieu Pass LNG, each phase consisting of 18 small liquefaction trains installed as nine two-train blocks (OGJ Online, Apr. 29, 2022).
CP2 will also include four 200,000-cu m full-containment LNG storage tanks. The 85.4-mile, 48-in. OD CP Express pipeline will carry natural gas to the 6-mile, 24-in. OD Enable Gulf Run Lateral for delivery to CP2. Both pipelines are part of the overall project awaiting FERC approval.
Venice Energy advances proposed Adelaide LNG project
Venice Energy, Adelaide, expects to reach a final investment decision (FID) on its LNG import terminal proposed for Port Adelaide’s Outer Harbour by August.
Venice completed a study in conjunction with SEA Gas, owners of the 680-km pipeline between Victoria and South Australia, confirming that the pipeline can be reconfigured to facilitate bi-directional flow between the two states.
Venice said the development means South Australia and Victoria will be able to secure gas supplies and avoid shortages, particularly during the peak winter period.
The Outer Harbour project will be able to receive LNG from the North West Shelf, Gladstone, and international sources. The project also will provide storage via a floating storage and regasification unit, through the SEA Gas pipeline, as well as storage maintenance at the Iona underground storage unit in western Victoria via regular imported shipments of LNG.
The project will consist of two new berths, cryogenic piping, gas loading arms, and associated infrastructure.
It will connect to the SEA Gas pipeline at a junction point about 150 m from the terminal boundary.
If the project reaches FID on schedule, construction will begin in October.