INDUSTRY BRIEFS

Gas processing

Koch Energy Services Co., Wichita, will build a 300 MMcfd cyrogenic gas plant at Venice, La., for Gulf of Mexico supplies landing in the area, including production from Shell's Mississippi Canyon Gathering System. At the tailgate, producers will have direct access to multiple gas markets through Texas Eastern, Columbia Gulf, and the Koch Gateway pipelines. The plant will be in service by November 1997.

Wildhorse Energy Partners, a joint venture of KN Energy Inc., Lakewood, Colo., and Tom Brown Inc., Midland, Tex., will buy natural gas processing assets in western Colorado and eastern Utah from Williams Field Services Group, a unit of the Williams Cos. The acquisition includes about 955 miles of gas gathering lines, two processing plants, a carbon dioxide treatment plant, and a dew point control plant. Total inlet capacity is about 55 MMcfd.

Exploration

Exxon AG and Shell Exploration Orient BV agreed to form a company for oil and gas exploration in central Poland. The new company, Polish Petroleum Development Co. Sp. z.o.o. (PPDC), requires approval from Polish authorities. PPDC will continue discussions started in 1993 with Polish officials on exploration opportuntities and concession arrangements in the Polish Trough, about 150 miles west of Warsaw.

Cogeneration

Calpine Corp., San Jose, Calif., and Phillips Petroleum Co. agreed to develop a 240,000 kw gas-fired cogeneration power plant in Pasadena, Tex. Calpine will own and operate the plant and sell about 90,000 kw of electricity and 200,000 lb/hr of steam to Phillips' Houston petrochemical complex under a long term, fixed-price contract. A unit of Calpine will sell surplus power. Construction is to begin in fourth quarter 1996 with commerical operation to start in August 1998.

Drilling-production

Abacan Resources Corp., Calgary, and partner Amni International Petroleum Development Co., Nigeria, raised $30 million to develop NGO field off Nigeria, where output of 30,000-40,000 b/d is expected by yearend. A production platform with 50,000 b/d capacity will be installed. Abacan plans to sell the oil to France's Total.

Leopardus Resources Ltd., Vancouver, B.C., signed a letter of intent with Zarara Petroleum Resources, Dubai, to acquire Zarara's rights in the Temane Permit, Mozambique. A discovery well drilled in 1967 was never tested, but a later appraisal well flowed 6 MMcfd of gas. Reserves are estimated at more than 1 tcf.

Oryx Energy Co., Dallas, and CNG Producing Inc., New Orleans, are nearly finished mating the two main hull sections of the Neptune spar, the Gulf of Mexico's first oil and gas production spar (OGJ, Nov. 21, 1994, p. 33). Partners expect the assembled hull to sail from Pascagoula, Miss., for upending about Sept. 21 in Neptune field in 2,000 ft of water on Viosca Knoll Block 826, after which plans call for installing Neptune spar's deck within a week. Neptune operator Oryx and CNG each holds 50% interest in the project.

Kazakhstan's Karachaganak gas/condensate field development may see another change of ownership. British Gas plc wants to cut its 42.5% stake in the project. BG and equal partner Agip SpA signed an exclusive agreement to boost output from the field under a 10 year program. At that time Karachaganak reserves were estimated at 20 tcf of gas and 2 billion bbl of liquids. Since then bureaucracy and politics have dogged development plans, and Russia's Gazprom has agreed to sell its 15% share to Lukoil. Mobil Corp. and Texaco Inc. are said to have expressed an interest in buying into Karachaganak.

Norway's Den norske stats oljeselskap AS (Statoil) let a $32 million contract to Belleli SpA, Mantua, Italy, to build four gas compression modules for its Aasgard production ship. The four modules will weigh a total 4,400 metric tons and be built at Belleli's Sicily yard. Fabrication will begin in mid-December for completion in September 1997. Aasgard oil production is to begin in October 1998.

Smedvig AS, Stavanger, took a 50% stake in a Tentech 700 design production vessel currently under construction in Japan for Rasmussen Offshore AS, Kristiansand, Norway. The vessel is expected to cost $145 million and have capacity to store 550,000 bbl of oil. It will be delivered to Norway for installation of process facilities in summer 1997. Smedvig said topsides will not be ordered until a firm contract is agreed for the vessel.

Export-imports

Norway's Gas Negotiating Committee agreed to a 20 year gas sales contract with Czech state firm Transgas on behalf of Norwegian gas producers. Statoil said deliveries are to begin next year and reach a plateau of 105 bcf/year in 2002. Before sales can begin, Transgas must find a supply route through Germany, and the Czech government must approve the deal.

Showa Shell Sekiyu KK, Tokyo, is studying the possibility of selling gasoline and lubricants in the Chinese market. This is Showa Shell's first bid to expand in Asian markets since top shareholder Royal Dutch/Shell lifted restrictions limiting Showa's operations to Japan alone.

Venezuela and Mexico renewed the San Jose oil treaty, an agreement under which both countries supply about 160,000 b/d of oil to Central American and Caribbean nations. The pact, originally signed in 1980, has been renewed annually ever since. The oil is exported to Barbados, Belize, Costa Rica, El Salvador, Guatemala, Haiti, Honduras, Jamaica, Nicaragua, Panama, and the Dominican Republic.

Pipelines

El Paso Natural Gas Co. reported a rupture on its 30 in. main line about 30 miles north of Roswell, N.M., Sept. 11 that injured one person and damaged two parallel lines and some adjacent non-El Paso gathering system facilities. One of the damaged lines was expected to be repaired by Sept. 12; the second was being evaluated. El Paso initially took 550 million MMcfd of capacity out of service of the pipeline's total 3.3 bcfd capacity but planned to return 480 MMcfd capacity to service Sept. 12.

Norsk Hydro let a $35 million contract to Dresser Industries Inc.'s Wellstream unit and Halliburton Inc.'s Rockwater unit for fabrication and installation of subsea lines for an initial cluster of wells to be tied into the Troll B platform in the Norwegian North Sea. The subsea lines will be installed in summer 1997, with production start-up slated for October 1997. The contract includes options for fabrication and installation of subsea lines for additional well clusters. Four clusters would be tied into Troll B and six to a new floating production platform slated for start-up in September 1999. Total contract value, including options, could reach $285 million.

Williams Natural Gas Co. (WNG), Tulsa, received inquiries from more than 50 potential shippers during an open season ended Aug. 28 for the proposed Zephyr project, which would create a seamless west-to-east route for transporting gas produced in the Rocky Mountains region to markets in the Midcontinent, Midwest, and East U.S. Involved are interconnects with a number of interstate pipelines. WNG intends to seek Federal Energy Regulatory Commission approval for the proposal in time for Zephyr to begin service Nov. 1, 1997.

Pacific Pipeline Systems Inc., Denver, began laying 1,400 ft of 30 in. pipe in Santa Clarita, Calif., as a prelude to constructing the main section of its proposed 132 mile heavy crude oil pipeline from Kern County, Calif., to refineries in the Los Angeles basin. Sponsors are seeking expedited action from the California State Supreme Court on a challenge of the project's regulatory certification and point out that no previous challenges have been granted. Pending court action, pipeline sponsors hope to begin construction of the main line in late October.

Shell Petroleum Development Co. of Nigeria Ltd. plans to build a $300 million pipeline to deliver gas to the delayed Aluminium Smelter Co. of Nigeria plant. The smelter, which will use gas from oil fields that currently flare associated gas, is expected to start up in 1997, 7 years after construction began.

Shell U.K. Exploration & Production let contract to Coflexip Stena Offshore Ltd., Aberdeen, for infield pipeline work in development of U.K. North Sea Curlew field. Work will include engineering, fabrication, and installation of flexible flowlines and dynamic risers, along with installation of control umbilicals and a 28 km, 12 in. rigid gas export pipeline. Offshore installation will take place during 6 months beginning April 1997. Curlew will be developed using a production, storage, and offloading ship, with first output expected in early 1998 (OGJ, Aug. 12, p. 27).

Power

Pilipinas Shell Petroleum Corp. and Occidental Petroleum Corp. offered to convert the mothballed Bataan nuclear power plant in the Philippines into a 1.2 million kw gas-fired station. Conversion is expected to cost $1.5 billion. Shell and Oxy plan to supply the plant with gas from their Malampaya/Camago gas fields off the Philippines. Malampaya and Camago are earmarked for development to provide gas for a number of electricity generation projects (OGJ, Oct. 10, 1994, p. 38).

Companies

Western Mining Corp., Melbourne, is selling its petroleum division assets, with the exception of its 53% interest in the new Pilbara Goldfields pipeline in Western Australia. The assets, valued at $416 million (Australian), include producing and developing fields in the offshore Carnarvon basin, U.S. production interests in Texas, Louisiana, New Mexico and the Gulf of Mexico and 40% of the undeveloped Kupe South and Toru gas/condensate fields off the southwestern tip of New Zealand's North Island.

Central Resources Inc., Denver, closed its $25 million purchase of virtually all the exploration and production assets of Giant Industries Inc., Scottsdale, Ariz., allowing Giant to focus on its core refining and marketing businesses. In the upstream sector, Giant will retain only gas properties that qualify for the federal coal seam tax credit. Central's acquisition includes reserves of about 8 million bbl of oil equivalent in the Four Corners region, Kansas, Oklahoma, and South Texas.

Hurricane Hydrocarbons Ltd., Calgary, raised $55 million (Canadian) for the first payment on purchase of a former state oil company in Kazakhstan. Funds will be used for the first $30 million (U.S.) payment on the $120 million deal for Yuzhneftegaz. The funds were raised by sale of special warrants in a private placement.

Refining

Mexico's state oil company Petroleos Mexicanos is seeking bids for a $1.2 billion expansion of its Cadereyta refinery in Nuevo Leon state. Pemex's goals are to produce reduced sulfur fuels and meet the growing demand for gasoline and diesel in the north. Pemex also wants to increase the refinery's heavy crude capacity to 270,000 b/d from 235,000 b/d.

Japanese refiners are planning to install new plants to reduce levels of benzene in gasoline and sulfur in diesel. The Ministry of International Trade and Industry is considering lowering maximum allowable benzene content in gasoline from the present 1 vol % to 5 vol %. The government earlier enacted legislation to reduce sulfur content of diesel to 0.05 wt % from 0.2 wt % effective October 1997.

Mobil Corp.'s Torrance, Calif., refinery was back on line at presstime last week following a Sept. 6 fire in the plant's platinum reformer (PTR). The fire, which caused no injuries, apparently involved a leak of gasoline at a pump in the PTR. The cause of the leak and source of ignition are under investigation. Mobil said product deliveries are unlikely to be disrupted.

Alternate fuels

Bitumenes Orinoco SA, (Bitor), a unit of Petroleos de Venezuela SA, sent its first shipment of Venezuela's trademark boiler fuel, Orimulsion, to China National United Oil Corp. for use in feasibility tests at electric and industrial plants. Under the agreement with the Chinese company, Bitor is scheduled to deliver an additional 150,000 metric tons of Orimulsion.

Petrochemicals

COGA Industries LLC, Chicago, let contract to Monsanto Enviro-Chem, St. Louis, to engineer, procure, and build the nitrogen fertilizer portion of COGA's proposed $950 million agricultural chemicals plant in Girard, Ill. The plant will use a coal gasification process to produce about 1,600,000 tons/year of granular and liquid nitrogenous fertilizer. Sponsors hope to begin construction in 1997, pending completion of financing and contractor selection. The plant will take about 3 years to build.

Borealis AS, Copenhagen, signed a memorandum of understanding to form a partnership with Ashland Plastics, a unit of U.S. firm Ashland Chemical Co., for small volume sales of Borealis polyolefins. Under the agreement, Ashland will accommodate about 1,500 customers who buy less than one truckload at a time of Borealis polyolefins. Borealis said the new arrangement will bring its small volume customers faster response times and improved delivery timetables. Ashland will complete the takeover in early 1997.

Pdvsa unit Pequiven SA plans to build a $120 million, 120,000 metric ton/year polyvinyl chloride resins plant to supply Venezuelan and other Latin American markets. The plant, to be built by Jantesa SA, Venezuela, and Technipetrol, Italy, is targeted for completion by August 1998.