INDUSTRY BRIEFS

LNG

Nigeria LNG Ltd. (NLNG) announced the receipt of first gas feed at its Bonny Island liquefied natural gas export project in Nigeria (see related story, p. 36). The gas was received by the Obiafu gas plant, owned by Italy's Agip International BV, one of the shareholders in NLNG. NLNG recently let contract to a consortium of companies for the construction of a third LNG train at the site (OGJ, Mar. 22, 1999, p. 45).

Gas processing

Gulf Canada Resources Ltd., Denver, began operations at its natural gas processing plant Mar. 26 near Steen, Alta. The plant is handling 33 MMcfd of sales gas from three wells. An additional well will begin production shortly, Gulf said, and two more wells will be tied in during winter 2000. Gulf operates and owns 100% working interest in 147,000 acres in the Steen area.

Exploration

Woodside Petroleum Ltd. unit Woodside Southeast Asia Pty. Ltd. signed an agreement with the Cambodian National Petroleum Authority to perform a 15-month, detailed geological and geophysical study covering 18,000 sq km off the western coast of Cambodia. The area to be studied is comprised of Blocks 1, 2, 3, 4, and 7. Following the study, Woodside may enter into production-sharing contracts with Cambodia. Woodside has already signed such agreements for Blocks 4 and 5 and has conducted 2D seismic work on neighboring Blocks 5 and 6 (OGJ, Mar. 23, 1998, p. 34).

Malaysia's Petronas
and Lasmo plc, London, secured a petroleum exploration license in Pakistan's Sindh province. Petronas will operate the 2769-4 license with a 57% interest, while Lasmo will hold 38% and Pakistan 5%. The license covers 2,612 sq km and is near a number of gas finds and gas transmission infrastructure. The firms plan to acquire 2D seismic data over the area in the next 12 months and will drill 3 exploration wells in the subsequent 2 years.

Companies

Phillips Petroleum Co. will acquire BHP Petroleum Pty. Ltd.'s interest in the Bayu-Undan gas/condensate field and Elang and Kakatua oil fields in the Australian-Indonesia Zone of Cooperation Area in the Timor Sea. The package also included BHP's interests in the nearby Sunrise, Troubadour, Loxton Shoals, Sunset, and Bard gas fields. BHP said it expects to record a gain of about $110 million (Australian) on the transaction. Phillips's total interest in Bayu-Undan field, which it operates, will increase to 50.3% and it will acquire 98 million bbl of oil, condensate, and NGL in the deal.

Apache Corp.,
Houston, acquired a 10% interest in East Spar field and an 8.4% stake in Harriet field, both in the Carnarvon basin off Western Australia, from British-Borneo Oil & Gas plc, London. British-Borneo said that it received $80 million plus interests of 15-50% in 11 Gulf of Mexico leases in exchange.

Sempra Energy,
San Diego, and Public Service Enterprise Group Global (PSEG), Ridgewood, N. J., won approval from the board of Chilquinta SA, Santiago, for their acquisition of its subsidiary Chilquinta Energia SA for $830 million. Under the deal's terms, Sempra and PSEG will acquire 90% of the shares of the Chilquinta unit, which is the third largest electricity distributor in Chile. Following this transaction, the 50-50 partners will make a tender offer to acquire the remaining 10% of Chilquinta Energia from other stockholders.

Phillips
signed an exploration and development agreement with Kelley Oil & Gas Corp., Houston, involving certain assets in West Bryceland and Sailes fields in northern Louisiana. Under the agreement, Kelley will receive $83 million from Phillips and will retain a 42 bcf, 8-year volumetric overriding royalty interest (VORI), which is expected to peak at average net production of 26.5 MMcfd in 2001. Kelley also will retain a 1% override on excess production above the VORI and 25% of its interest in the Cotton Valley formation. In turn, Phillips will operate, develop, exploit, and explore the assets.

Koa Oil Co.,
Tokyo, will cut its work force by about 28% by March 2000 from the current level of 1,044. About 290 workers, including some being moved to affiliates, will retire from the company before the March 2000 deadline. Koa said its work force will decrease further to 720 workers by March 2001.

Gas distribution

Sempra Energy is the likely winner of a bidding round for the natural gas distribution rights in the La Laguna-Durango region of north central Mexico. As of Apr. 9, Sempra was the only company to register in the bidding, said Mexico's Energy Regulatory Commission (CRE). CRE will decide by May 20 if Sempra meets technical and economic requirements for the bidding. The La Laguna-Durango area includes the cities of Torre?n, G?mez Palacio, Ciudad Lerdo, and Durango. In 1997, local industry in the area used an average of 16 MMcfd of natural gas, while the electrical plant at Ciudad Lerdo used an average of 61 MMcfd. If awarded distribution rights, Sempra must commit to serving at least 50,000 clients by the end of the 5-year operation; Sempra is seen investing about $30 million in the project.

Cogeneration

South Coast Power Ltd., a joint venture of Scottish Power plc and CSW International Inc., let a $215 million turnkey contract to ABB Group for the engineering, procurement, and construction of a 400-MW combined-cycle cogeneration power plant at Shoreham on the south coast of the U.K., west of Brighton. ABB will also be responsible for maintaining the plant under a 6-year contract. Start-up of the plant is expected in fourth quarter 2000.

Belgium's Electrabel
let contract to Dresser-Rand Co. to provide gas turbine equipment for a cogeneration power plant planned at the Solvay chemical complex in the Jemeppe-Sur-Sambre industrial area of Belgium. The work will involve two DR63G gas turbine generator packages, to be built by Dresser-Rand AS at Kongsberg, Norway, plus related services and equipment. The units are slated for start-up in second quarter 2000.

Drilling-production

Saipem SpA, let a $15 million contract to ABB Vetco Gray, Houston, for the completion of the riser system for a newbuild drillship, which will be operate in water up to 10,000 ft. The drillship, being built at the shipyard of Samsung Heavy Industries Co., Seoul, is scheduled for delivery in second quarter 2000.

Texaco North Sea U.K. Co.
let a £37 million ($60 million) contract to a joint venture of Cooper Cameron (U.K.) Ltd. and Brown & Root Ltd. for an expansion of U.K North Sea Block 13/22a Captain field production facilities. The contractors will design, procure, build, and install an 18-slot subsea template, christmas trees, and a control system, which will be tied back to a new process and utilities platform. The field was developed with a wellhead platform and production/storage tanker. The new facilities are due on stream in summer 2000.

Polar Lights Co.,
a joint venture of Conoco and Russian companies Arkhangelskgeoldobycha and Rosneft, reported that Ardalin field, in northern Russia's Timan Pechora basin, has produced 50 million bbl of oil since start-up in 1994 (OGJ, Sept. 5, 1994, p. 38). Ardalin, about 1,000 miles northeast of Moscow, is the largest of the fields in Polar Lights' JV area. The field's 11 wells are producing about 36,000 b/d of oil, which is transported through a 42-mile pipeline to the existing Russian pipeline grid. Polar Lights interests are Conoco 50%, Arkhangelskgeoldobycha 30%, and Rosneft 20%.

BHP Petroleum (Americas) Inc.,
Houston, and partners logged 90 net ft of natural gas pay in two zones with a well on West Cameron Block 76 in the Gulf of Mexico. Partners in the block, in 36 ft of water about 20 miles south of Cameron, La., are operator BHP 33.76%; Pittsburgh-based Consolidated Natural Gas Co. unit CNG Producing Co. 40%; Houston Exploration Corp., Houston, 12.375%; Ridgewood Energy Equity Income 11.24%; and Meridian Resource Corp. unit Cairn Energy 2.625%. Well B3 flowed on test 22.8 MMcfd of gas and 141 b/d of condensate. Well B4, which is being completed, logged 285 net ft of gas pay in three zones. The partners intend to drill a third well, B5, later in 1999.

Refining

Foster Wheeler Energy Ltd., a U.K.-based unit of Foster Wheeler Corp., Clinton, N.J., began front-end engineering design work for Vietross's Dung Quat refinery in Quang Ngai province in Viet Nam (OGJ, Dec. 7, 1998, p. 46). Vietross, a joint venture of Vietnamese state oil firm Petrovietnam and Russia's Zarubezhneft, let the $15 million contract to Foster Wheeler for the development of the $1.3 billion, 130,000 b/d refinery; it will be Viet Nam's first.

Bahrain
is preparing the last phase of a $400 million plan to reduce the sulfur content in diesel produced at its Bahrain Petroleum Co. (Bapco) refinery. A contractor has yet to be announced. Once the project is completed in 2003, Bapco will produce diesel containing 0.05% sulfur, compared with a previous level of 0.75%. Production of the new diesel fuel is expected to reach 100,000 b/d. The project is part of an $800 million revamp on the 63-year-old refinery.

Valero Energy Corp.,
San Antonio, let a $90 million, 15-year contract to Praxair Inc., Danbury, Conn., to build, own, and operate a hydrogen purification plant at its Texas City, Tex., refinery. The plant will be able to purify 69 MMcfd of hydrogen that will be used at Valero's Texas City and Houston refineries and by other possible customers. Completion of the hydrogen plant is expected in mid-2000.

Petrochemicals

BASF Corp., Mount Olive, N.J., let contract to Jacobs Engineering Group Inc., Houston, for engineering and procurement services for its ethylene oxide/ethylene glycol (EO/EG) capacity revamp project at the company's Geismar, La., plant. The work, which is scheduled for completion by first quarter 2001, will increase capacity for ethylene oxide equivalents by 150,000 metric tons/year. EG capacity will be increased by 140,000 tons/year. The project calls for a new single-train, 330 million lb/year EO plant and the revamp of an existing EG plant.

Gas supply

Australian Gas Light Co., Melbourne, secured a second contract with Australia's newly privatized Victoria state natural gas retailer Energy 21. The agreement extends AGL's gas sales into Victoria and will aid with the state's peak demand during the upcoming winter heating season. AGL will supply Energy 21 with 1.4-3.3 bcf of gas during Apr. 1-Oct. 31, 1999. The contract is in addition to a previously signed 5-year deal to supply Energy 21 with 23.3 bcf of gas. The sales have been made possible by last year's completion of a pipeline link-known as the Interconnect pipeline-between the New South Wales and Victorian gas distribution networks.

Oilsands

Shell Canada Ltd., Calgary, received regulatory approval for a $1.7 billion (Canadian) oilsands upgrader at Scotford, near Edmonton, and modifications to its existing refinery there. The upgrader is part of a $3.8 billion plan for a new Muskeg River oilsands mine and pipeline from the new mine to Scotford. Production of 150,000 b/d of synthetic crude is to start up in second half 2002. Construction could begin later this year, said Shell. The pipeline still requires regulatory approval, and Shell is expected to make a final decision on the overall project this fall. The company is looking for a new partner after BHP withdrew from a 25% interest in the project (OGJ, Apr. 12, 1999, p.32).

Mobil Oil Canada Ltd.,
Calgary, postponed its $2.5 billion Kearl oilsands project in Alberta by 2 years because of low oil prices. The company said the project will be completed in 2005 instead of 2003 (OGJ, Apr. 12, 1999, p. 32).

Pipelines

Canada's National Energy Board approved a request by BC Gas Utility Ltd., Vancouver, B.C., for a receipt point on the Westcoast Energy Inc. natural gas pipeline at Kingsvale, B.C. BC Gas applied to the board after Westcoast refused a request from the company in June 1998. Gas received at Kingsvale will be delivered to the Huntingdon, B.C., delivery area.

Power

Sunset Energy Fleet LLC will develop a 520-MW natural gas-fired merchant electric power plant at Sunset Park, N.Y. The plant, to be built upon permanently secured barges, will be docked along the Brooklyn waterfront.

Avista Corp.,
unit Avista Power Inc. plans to build a 120-MW combined-cycle, natural gas-fired power plant at a site it acquired in New Mexico from Texas New Mexico Power Co. unit TNP Technologies LLC. Construction of the plant, expected to cost $70 million, is slated to begin in early 2000.

Alternate fuels

Italy's ENEL signed a contract with Petroleos de Venezuela SA's Bitor SA unit to supply up to 3 million metric tons/year of Orimulsion fuel-a mixture of bitumen, water, and a surfactant-for use at its 960-MW Fiume Santo power plant at Sardinia. About 750,000 tons/year of Orimulsion is already being transported to ENEL's Brindisi power complex, and Italy is rapidly becoming the largest international consumer of the boiler fuel.

Terminals

China plans to build four large crude oil tanker terminals by 2005: at Qidong, in Jiangsu province; at Cezi, in Zhejiang province; in Tianjin province, northern China, close to Beijing; and Lingao, in southern China's Hainan province. The terminal at Qidong is designed to handle tankers up to 250,000 dwt; Cezi, for 200,000 dwt tankers; Tianjin, up to 150,000 dwt; and Lingao, up to 200,000 dwt. Each will have a handling capacity of 10-20 million metric tons/year of crude oil. China has 11 crude oil tanker terminals, and only five are capable of handling tankers larger than 200,000 dwt.