Petrochemicals
Taiwan's Chinese Petroleum Corp. (CPC) and partners agreed on interests to be held in a proposed $7.4 billion naphtha cracker complex, Taiwan's eighth. CPC will invest $2.6 billion for a 35% stake. Other interests will be Chinatrust Group 33%, Lee Chang Yung Industrial Corp. and Far East Textile Group 10% each, and 10 smaller investors jointly holding 12%. The complex will refine 200,000 b/d of crude and produce 900,000 metric tons/year of ethylene. The partners are studying four sites in Taiwan but may build the complex elsewhere in Asia if there is local opposition.
Exports-imports
CPC plans to begin importing Alaskan North Slope (ANS) oil as early as February 1996. While no formal agreement has been signed, CPC is prepared to begin imports as soon as the U.S. government gives approval. The U.S. Congress is expected soon to repeal a ban on ANS exports, and President Clinton is likely to sign the measure (OGJ, Oct. 9, p. 42).
Gas storage
Market Hub Partners LP (MHP) successfully completed its brine disposal well at the Tioga gas storage site in Tioga County, Pa., setting the stage for developing salt cavern gas storage. The two caverns, each with at least 2.5 bcf of working gas capacity, will start up in phases beginning in winter 1997. Full capacity will be available in winter 1999. MHP, a limited partnership owned by a group led by Tejas Power Corp., Houston, plans to complete its Federal Energy Regulatory Commission filing in 30-45 days.
Exploration
Amoco Canada Petroleum Ltd., Calgary, will spend $90.25 million (Canadian) the next 5 years exploring acreage off Newfoundland. Amoco secured exploration rights to the 44,737 acre West Bonne Bay block about 25 miles southeast of Hibernia oil field. In addition, Amoco must drill a wildcat to extend the lease 4 years. Amoco paid $2.8 million for another exploration license in the area in 1994.
Trinidad Exploration & Development Ltd. (TED), a privately held U.K. company, received a license from Trinidad and Tobago to explore for hydrocarbons on Trinidad's southwestern peninsula. The license covers about 3,200 acres in an area that has not seen drilling in more than 30 years. TED plans to drill shallow, low risk, Pliocene prospects beginning in early 1996 and is considering probing high risk Miocene targets on trend with Venezuela's Pedernales oil field.
Mobil Oil Tulpar Inc. and its three Kazakh partners Aktyubinskneft, Poisk, and Tulpar started work related to exploration of its 4.4 million acre Tulpar block in Northwest Kazakhstan (OGJ, Apr. 24, p. 35). Their Tulpar Munai Ltd. venture is preparing an environmental impact assessment and may begin an 8-10 seismic survey late this year. A wildcat could spud in early 1997.
Lubriicants
Chevron Chemical Co. let contract to Chiyoda Corp. for front end engineering of a world scale, export oriented lubricating oil and fuel additives plant at Jurong Island, Singapore. Chiyoda recently completed feasibility engineering for the project. Competitive bidding and contract award for the project are expected in mid-1996, with start-up slated for mid-1998.
Refining
U.S. Export-Import Bank approved $296 million in financing to support sale of equipment and services by Fluor Daniel Inc., Irvine, Calif., to debottleneck and expand capacity of state owned Pertamina's 285,000 b/d Cilacap refinery in Indonesia.
Giant Industries Inc., Scottsdale, Ariz., closed its purchase of the 18,000 b/d Bloomfield, N.M., refinery from Gary-Williams Energy Co., Denver (OGJ, Aug. 21, p. 32). It also closed purchase of a crude oil gathering pipeline in the Four Corners area from Meridian Oil Inc., Houston. The system serves Giant's Bloomfield and Ciniza, N.M., refineries. Giant is considering adding an isomerization unit at Bloomfield and expanding its retail marketing network in the area.
Drilling-production
Ecumed Resources Ltd., a privately owned European firm, signed a letter of intent to acquire a 50% interest in a production sharing contract in Ukraine's Crimea from HHO Ltd., a unit of Epic Energy Inc., formerly OTM International Development Inc., Vancouver, B.C. (OGJ, Mar. 20, p. 40). Ecumed will contribute about $10.2 million of the next $12 million in Aktash field development costs and $16.7 million of the first $25 million in development costs on other Crimean projects. Epic also agreed to Ecumed conveying 50% of its interest to Calgary's Canadian Leader Energy Inc.
Indonesia's giant Duri oil field, currently producing a record 300,000 b/d, yielded its 1 billionth bbl in September. Duri is operated by PT Caltex Pacific Indonesia (CPI), a 50-50 venture of Chevron Corp. amd Texaco Inc. working under a production sharing contract with state owned Pertamina. Discovered in 1941 and started up in 1958, Duri's primary production peaked at 65,000 b/d before declining until 1984. CPI in 1985 started what would become the world's largest steamflood. It is using advanced seismic imaging to underpin a continued expansion of the steamflood.
Dragon Oil plc, Dublin, agreed to pay as much as $35 million for a 30% interest in Block II in the Caspian Sea off Turkmenistan operated by Larmag Energy NV, Amsterdam. A venture of Larmag and state owned Chelekenneft is working to hike production from the block's Lam and Zhdanov fields (OGJ, Jan 30, p. 36). Production averaged 9,200 b/d of oil and 30 MMcfd of gas in first half 1995. Remaining proved and probable reserves are about 320 million bbl of oil and 700 bcf of associated gas. Dragon estimated 1.9 tcf of proved nonassociated gas is undeveloped and said the fields could produce 75,000 b/d in 5 years.
Arch Petroleum Inc., Fort Worth, started a pilot infill drilling program on its 12,000 gross acre (8,700 net acre) Lea County, N.M., leases. Arch hopes to boost primary recovery by about 1.9 million bbl of oil and 8 bcf of gas by reducing well spacing to 20 acres from 40 acres and drilling 40 wells. The seven well pilot in Teague Blinebry field is designed to confirm the incremental reserves estimates and justify additional drillsites. In addition, Arch is continuing a well recompletion program on the leases that to date has boosted net production to 775 b/d and 4.5 MMcfd from 450 b/d and 2.6 MMcfd.
Three oil companies agreed to pay a combined $1.088 million to resolve allegations they violated wastewater discharge permits at 17 platforms and other operations in Alaska's Cook Inlet. Under a settlement with U.S. Environmental Protection Agency, Unocal Corp., Marathon Oil Co., and Shell Oil Co. did not admit or deny allegations made in EPA complaints filed in February. Proceeds will go to support local environmental group Cook Inlet Keeper.
Lomak Petroleum Inc., Fort Worth, closed acquisition of Appalachian leases from Transfuel Inc. for $21 million in cash and stock. Included are oil and gas reserves, gas gathering lines, and undeveloped acreage in Ohio, Pennsylvania, and New York. Including its recent purchase of Parker & Parsley Petroleum Co.'s Appalachian assets, Lomak expects its production to rise to 10,000 b/d of oil equivalent by yearend from 4,950 b/d in 1994.
United Meridian Corp., Houston, purchased producing oil and gas leases from Pennzoil Exploration & Production Co. for $58.9 million. Involved are 30 fields in the Permian basin and four fields in the Gulf Coast region that produced 2,300 b/d of oil and 16 MMcfd of gas in 1994. Reserves in the deal total 8.1 million bbl of oil and 49.9 bcf of gas.
Vintage Petroleum Inc., Tulsa, closed its acquisition of BG Argentina SA from British Gas plc for $37 million cash (OGJ, Aug. 7, p. 37). BG Argentina owns a 50% working interest in three producing concessions on the southern flank of the San Jorge basin in Argentina's Santa Cruz province that are operated by Cadipsa SA, Buenos Aires. Separately, Vintage agreed to acquire another 22.8% of Cadipsa for $6.6 million, boosting its ownership of Cadipsa to more than 70%. The acquisitions enable Vintage to add about 43.4 million bbl of oil reserves in Argentina at a cost of $2.56/bbl.
Pipelines
U.S. Federal Energy Regulatory Commission approved a settlement with Southern Natural Gas Co., a unit of Sonat Inc., Birmingham, Ala., that resolves the company's costs associated with its transition to unbundled rates. FERC said the settlement resolves 23 rate cases, lowers rates, and provides an estimated $146 million in customer refunds.
MOL,
Hungary's state oil company, let contract to KVV, Soifik, Hungary, to lay the 43.5 mile, 27.5 in. Hungarian section of a gas pipeline from Gyor, Hungary, to Baumgarten, Austria, at a cost of about $18 million (see map, OGJ, Sept. 11, p. 26).
MOL offered Croatia 74 million deutschemarks ($55.5 million) for a 10% interest of the Adria oil pipeline that transits Hungary and the former Yugoslavian republic to the Adriatic Sea. MOL wants to pay 30% of that sum up front and the balance in 5 years. A joint bid with Austria's OMV fell through. Croatia, however, wants to sell 15% of the line. OMV alone is offering $50-90 million for a 15% stake in the pipeline but wants the final sum tied to the line's profitability.
Foothills Pipe Lines Ltd., Calgary, plans to spend $25 million (Canadian) excavating and repairing 20 sections of its 1.5 bcfd main gas pipeline from Alberta to the U.S. Midwest. A major explosion on the line near Maple Creek, Sask., in 1994 was attributed to sulfur that leached from sulfurcrete weights used to hold the pipe down across swampy land and reacted with other materials. The line will be shut down Nov. 14-17 to replace weights and lay new pipe around trouble spots.
Gas marketing
Mobil Erdgas-Erdoel GmbH, Hamburg, started long term deliveries of gas to Verbundnetz Gas AG, Leipzig, marking Mobil's first sale of gas into eastern Germany. Deliveries will increase to a 100 MMcfd plateau by 2000-01 from the current 50 MMcfd. Supply sources include Mobil's 100% owned Walsrode gas fields about 50 miles south of Hamburg.
Utilities
Equitable Gas-Energy Co., a unit of Equitable Resources Inc., Pittsburgh, was chosen by 74% of participants in a project that permits residential and small commercial customers to choose their natural gas supplier. The 1 year experiment is being conducted by MidAmerican Energy Co. in Rock Valley, Iowa. Participants can buy gas from three suppliers, including Equitable, or remain with local distribution company MidAmerican. Service is to begin Nov. 1 via MidAmerican. It is said to be the first time in the U.S. residential gas users will be able to buy gas from an entity other than the local utility.
Eighteen companies prequalified for bidding for Hungary's five regional gas distribution companies under the country's privatization program (OGJ, Oct. 2, p. 23). A 50% interest plus one vote is being offered in each of the firms, although no bidder may purchase more than two. Bid deadline is Nov. 20.
Companies
K2 Energy Ltd., Calgary, failed in an attempt to enter bidding for the assets of Nova Scotia Resources Ltd. (NSRL). A Nova Scotia court ruled public assets such as the provincially owned energy company do not require a duty of fairness until bids are submitted. K2 first was told it could have access to NSRL's financial data room, then that approval was withdrawn, and K2 sued, claiming unfair treatment in the bidding process. It is the second such complaint related to the pending sale of NSRL (OGJ, Oct. 9, p. 45).
LNG
Atlantic LNG Co. of Trinidad and Tobago signed a gas purchase contract with Amoco Trinidad Oil Co. to feed its proposed 3 million metric ton/year liquefied natural gas export plant on Trinidad (OGJ, Sept. 18, p. 42). Amoco will supply all of the plant's gas, as much as 475 MMcfd, for at least 20 years from its East Mayaro and South SEG fields off East Trinidad. First export shipment is slated for early 1999. The last remaining major step in the project is award of the main engineering, procurement, and construction contract, scheduled for early 1996.
Cove Point LNG Ltd. Partnership started commercial operation of the LNG peaking/storage site at its Cove Point, Md., LNG terminal. The liquefaction unit produces LNG at a rate equal to 15 MMcfd of gas. Injection during the first season will fill one of the site's 1.25 bcf storage tanks. The partnership, owned by units of Columbia Gas System Inc. and Potomac Electric Power Co., signed contracts covering more than one third of the site's firm storage capacity, which corresponds to deliverability of 220 MMcfd. Recommissioning Cove Point and building a liquefaction unit cost about $26 million (OGJ, Dec. 19, 1994, p. 28).
Gas processing
EPA's first enforcement settlement with an entire U.S. industry will cover natural gas processors. It involves the alleged failure of gas processors to report their volumes and sites of toxic chemicals every 4 years, as required by law. The agency reached the agreement with the Gas Processors Association. In the 51 cases covered by the settlement, companies will pay a total $969,000 in penalties.
KN Energy Inc., Lakewood, Colo., closed its purchase of gathering and processing assets in the Texas Panhandle from Parker & Parsley Petroleum Co., Midland, Tex. (OGJ, Aug. 28, p. 42). Included is a 30 MMcfd cryogenic natural gas liquids processing plant and about 900 miles of gathering lines.
