INDUSTRY BRIEFS

NGL

Solex Gas Liquids Ltd., Calgary, reported that the fire and explosions at its Taylor, B.C., natural gas liquids plant last month resulted from an accidental release of hydrocarbons (OGJ, Feb. 8, 1999, p. 34). Evidence indicates the release was caused by the mechanical failure of a piece of equipment engaged in routine operations and owned and operated by an independent contractor. The blast forced evacuation of Taylor and closed the Alaska Highway for 8 hr. Investigators are conducting a detailed damage assessment of the shutdown plant.

Oilsands

Suncor Inc., Calgary, created an alliance of contractors to work on its $2 billion (Canadian) Millennium oilsands expansion project near Fort McMurray, Alta. The alliance includes Bantrel Inc., Fluor Daniel Canada Inc., SNC-Lavalin Engineers & Constructors Inc., and Millennium Construction Contractors-a joint venture of Bechtel Canada Co. and Fluor Constructors Canada Inc. Millennium, to be completed by second half 2001, was approved by Suncor's board and awaits regulatory approval. The project will have an estimated production of 220,000 b/d of oil, double its current production.

Alberta Energy and Utilities Board
(AEUB) approved a bid by Shell Canada Ltd., Calgary, to develop a $1.4 billion (Canadian) oilsands project near Fort McMurray, Alta. A final decision on the Muskeg River Mine project will be made in summer or fall 1999. The mine is part of a $3.8 billion development project, which includes a heavy oil upgrader at Scotford, and a $500 million pipeline connecting the mine to the upgrader. AEUB will consider the upgrader and pipeline projects on their own merits.

Drilling-production

Daewoo Heavy Industries Ltd., Seoul, began drydock construction of a floating production, storage, and offloading (FPSO) vessel for the Terra Nova oil field development project off Newfoundland. The FPSO is scheduled to be completed by December 1999. The 958-ft unit, with a storage capacity of 900,000 bbl of crude oil, will sail under its own power to Bull Arm, Newf., for installation of topsides modules.

Hibernia oil field
operators expect to reach peak production of 135,000 b/d of crude oil from the platform off Newfoundland in March. The platform is producing 100,000 b/d, and a new gas-injection well was added to the platform's three oil producers, two water-injection wells, and two shut-in wells. Emission restrictions, now lifted, limited production to an average 68,000 b/d in January (OGJ, Jan. 4, 1999, p. 30). Gas injection is expected to increase oil recovery from the reservoir to an ultimate 45% vs. primary recovery of 15%.

Total
and Norsk Hydro AS each transferred a 5% interest in Kharyaga oil field, under development in Russia's Nenets autonomous region, to Nenets Oil Co. Total now holds a 50% stake in the field, Norsk Hydro 40%, and Nenets 10%. A production-sharing agreement was signed in December 1995 involving the development of Horizons 2 and 3 in Kharyaga field, above the Arctic Circle. The first development stage is under way, with a target of 10,000 b/d of oil. Production will begin in third quarter 1999.

Statoil AS
let a $95 million contract to Kvaerner Oil & Gas AS, Oslo, to build a wellhead platform topsides for development of Huldra discovery on Block 30/2a in the Norwegian North Sea. Development will involve an unmanned wellhead platform in 125 m of water, tied back by a gas pipeline to Heimdal platform and by a condensate pipeline to Veslefrikk platform. The platform is to begin production by October 2001 and will be built at Kvaerner's Stavanger yard. Kvaerner will undertake engineering, procurement, construction, and mechanical completion of the topsides, along with offshore hook-up and commissioning assistance.

Unocal Corp. unit
Unocal Makassar Ltd.'s and Mobil Makassar Inc.'s deepwater appraisal well in West Seno field off East Kalimantan, Indonesia, flowed at a combined rate of 19,344 b/d of oil and 18.6 MMcfd of gas from three intervals totaling 142 ft of pay. West Seno No. 4, drilled in 3,101 ft of water, encountered 398 ft of total vertical oil and gas pay at 6,690-9,010 ft TVD. Unocal estimates West Seno oil and gas reserves at 150 million boe. Unocal intends to put the development project on a fast track and expects oil production to begin in 2001 (OGJ, Feb. 1, 1999, p. 31).

Russia's oil firm Yukos
plans to invest more than 70 million rubles to develop several oil fields in the Khanty Mansi autonomous region of Russia. Yukos began drilling operations at the Western Malo-Balyk and Medium Balyk oil fields. The fields are estimated to hold about 365 million bbl of oil. Yukos expects first oil by April 1999.

Courts

Australia's Federal Court cleared the way for Victoria's gas consumers to sue over last year's shutdown of Esso Australia Ltd.'s Longford gas plant (OGJ, Feb. 15, 1999, p. 38). The claimed $1 billion (Australian) action, initially brought by three representative groups, was allowed to continue as one consolidated action. Esso's application to strike out the actions as an abuse of process was dismissed. Businesses can now make a claim for financial losses, while individual workers who lost work because of the gas cuts can claim lost wages. Esso said it is pleased that it now faces only one action and believes it has a good case to successfully defend the claims.

Exploration

Oil Search Ltd. disclosed that its Kimu 1 gas discovery, drilled on the PPL193 permit in the foreland region of Papua New Guinea, is capable of producing more than 50 MMcfd. Kimu 1 encountered a 100 ft column of gas-saturated sands in the Alene sandstone (OGJ, Feb. 1, 1999, p. 34). Operator Oil Search spudded Koko 1 wildcat, 16 miles west of Kimu 1.

Sherritt International Corp.,
Calgary, discovered oil after drilling the Canasi 1 wildcat to 2,156 m on Block 7 in Cuba. The well's potential flow rate is put at 1,500 b/d. The pay zone was crossed horizontally over 400 m with no interruption until bottom at 2,556 m. The well's partners-operator Sherritt; Pebercan Inc., Ville St. Laurent, Que.; and France's Maurel & Prom-have decided to put the well into production and plan to drill another development well on the same structure in the next few months.

Phillips Petroleum Co. U.K. Ltd.
announced test results for a new-pool wildcat drilled in 250 ft of water on U.K. North Sea Block 30/7a by the Santa Fe 135 semisubmersible rig. The well flowed 4,000 b/d of oil and 42 MMcfd of gas through a 40/64-in. choke at 6,080 psi. The discovery, 4.5 miles from Phillips's Judy platform, is a candidate for development.

Refining

Petroleos Mexicanos let contract to a consortium led by Mexico's Grupo Tribasa SA to revamp its Ciudad Madero refinery (OGJ, Jan. 18, 1999, p. 22). Other consortium members include South Korea's Sunkyong Group and Germany's Siemens AG. The revamp, said to cost $1.2 billion, will mean the refinery will be able to process an additional 112,000 b/d of heavy Mayan crude and increase its yield of gasoline by 30,000 b/d.

TransContinental Refining Corp.,
formerly TransAmerican Refining Corp., changed its name to Orion Refining Corp. At its Norco, La., refinery, Orion is currently operating its crude unit, vacuum unit, 75,000 b/d delayed coker, three hydrodesulfurization units, and one sulfur unit. The plant's 100,000 b/d fluid catalytic cracker is slated to start up later this year (OGJ, Nov. 9, 1998, p. 68).

Petrochemicals

Turkmenistan's Turkmenneftegas State Trade Corp. licensed Montell Polyolefins Co. NV's Spheripol polypropylene (PP) process. The state firm plans to build an 80,000 metric ton/year polypropylene plant at Turkmenbashi. The plant, Turkmenistan's first PP unit, is slated for completion in fourth quarter 2001. The state firm bought the license through Japanese contractor JGC Corp., which has built five Spheripol plants in Southeast Asia.

Pipelines

Australian Gas Light Co. (AGL) plans to lay a $96 million (Australian) natural gas pipeline in central New South Wales beginning in 2000. The Central Ranges pipeline will include a 300-km extension from Dubbo-which itself is a spur from the main Cooper basin-Canberra/Sydney trunk line-to Tamworth in the north-central part of the state. It will also include a 1,000-km distribution system that will deliver gas to nine other centers in the region. The project is slated for completion in 2 years. AGL says the region is already home to major industries that are currently dependent on coal or LPG for their energy needs. The gas will be made available to potential customers in the same price range as for Sydney customers.

East Breaks Gathering Co. LLC
signed an agreement with Exxon Co. U.S.A. and BP Amoco plc to own and operate a new 85-mile, primarily 20-in. natural gas pipeline extending from Exxon's and BP Amoco's Alaminos Canyon Block 25 production facility, 160 miles south of Galveston, Tex., to an existing interconnection point with High Island Offshore System on High Island Block A-573. The pipeline, estimated to cost $90 million, will have capacity of more than 400 MMcfd. East Breaks Gathering is comprised of Leviathan Gas Pipeline Partners LP 40%, ANR Pipeline Co. 40%, and Natural Gas Pipeline Co. of America 20%.

Columbia Gulf Transmission Co.,
Houston, received approval from the Federal Energy Regulatory Commission to add to its main line 309 MMcfd of new firm transportation service. New facilities needed for the expansion include three Solar turbines that will replace three Pratt & Whitney compressor units being retired. The expansion, expected to cost about $37 million, is slated for completion by yearend.

Blue Stream Project
partners Saipem SpA and Gazprom let an $8 million engineering contract to Bouygues Offshore SA for the first phase of the $3 billion, 400-km natural gas pipeline to be laid across the Black Sea from Russia to Turkey (OGJ, Feb. 8, 1999, Newsletter). Bouygues will build the main compression station at Beregovaya, Russia.

Terminals

Kaneb Pipe Line Partners LP's U.K. terminal subsidiary ST Services Ltd. acquired six terminals in the U.K. from GATX Terminals Ltd. for £22.6 million and the assumption of certain debts. The terminals, with an aggregate tank capacity of 5.5 million bbl, are in England, Scotland, and Northern Ireland and are served by deepwater docks. The purchase increases ST Services' global capacity by 25%.

Companies

Shell Bangladesh Exploration & Development BV took over operatorship of Blocks 15 and 16 off Bangladesh from Cairn Energy plc, Edinburgh. This follows the establishment of an alliance between the two companies to operate assets mainly owned by Cairn, including Sangu field (OGJ, May 12, 1997, p. 32). The move is expected to result in job losses at Cairn's Edinburgh base and formation of a autonomous business unit in Bangladesh.

Azerbaijan
granted Canada's Alberta Energy Co. (AEC) a 5% stake in the existing multinational consortium Azerbaijan International Oil Co. (AIOC), comprised of BP Amoco, Statoil AS, Azerbaijan state oil firm Socar, and a Turkish oil group. AEC plans to concentrate efforts on developing Alov oil field in the Caspian basin.

Scotoil Group plc,
Aberdeen, is to open the city's first drill cuttings recycling plant, with plant throughput of 45,000 metric tons/year and demand from U.K. offshore operators initially expected to amount to 30,000 tons/year. The plant incorporates a refurbished recycling unit that had been installed offshore. The new facility was built 200 m from the quayside at Aberdeen harbor to allow cuttings to be loaded directly from offshore supply vessels to the plant. It was the result of a 2-year, £450,000 ($745,000) development. Scotoil has begun promoting the facility to U.K. offshore operators and drilling contractors.

Japan's Marubeni Corp.
signed a Y50 billion, 3-year supply contract with ARCO for at least 500,000 tons of steel tubular goods to be used in its oil and gas fields worldwide. Marubeni will procure the goods from Kawasaki Steel Corp. and other Japanese steelmakers and supply it to ARCO's fields in the Middle East, Africa, Latin America, and other regions. ARCO requires about 500,000 tons of steel pipe for current and planned projects. ARCO expects to require an additional 500,000 tons if it proceeds with a liquefied natural gas project in Alaska that is under study by a group including the two companies. ARCO is trying to cut the number of its suppliers from more than 10,000 to 100.

Gas gathering

EuroGas Inc., New York, will form a 50-50 joint venture with Poland Oil & Gas Co. to acquire a 50% interest in four natural gas fields in western Poland. EuroGas plans to build a gathering system to connect the fields to a proposed power plant in Zielona Gora. Current production capacity indicates potential delivery of 38 MMcfd. EuroGas estimates reserves of the four fields at about 403 bcf.

Government

U.S. Minerals Management Service wants to amend its rules on the delegation of federal mineral auditing responsibilities to states. The 1997 rules, implementing the Federal Oil and Gas Royalty Simplification and Fairness Act, require participating states to assume auditing for all federal leases within a state. The revision would let states determine what audit coverage they can provide. Ten states currently participate.

Environment

U.S. Environmental Protection Agency plans more health tests regarding Ethyl Corp.'s manganese-based gasoline additive MMT. EPA said that, because of continuing uncertainties regarding the public health effects of MMT and the potential of widespread public exposure to its emission products, it is proposing a testing program under the Tier 2 gasoline standards provisions.