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News in brief ConocoPhillips set to spend $1.8 billion on Bohai Bay, say Chinese news reports
ConocoPhillips plans to invest $1.8 billion in production and other facilities for the Penglai 19-3 field in Bohai Bay, according to Chinese news reports.
The project will include a floating production, storage and transport facility that could be nearly a thousand feet long, or about the length of an aircraft carrier. It will be able to process 190,000 barrels daily.
The second phase of the project will be developed jointly by ConocoPhillips and China’s state-owned China National Offshore Oil Corp., which will have a 51 percent stake.
The field has recoverable reserves of about 500 million barrels in the main structure. Once the second phase construction is finished, production is expected to run at 140,000 to 160,000 barrels daily.
Lukoil shows healthy profit Russia’s OAO Lukoil has reported a doubling of profits in the third quarter, with output rising 6.7 percent to 1.75 million barrels a day. ConocoPhillips owns a 10 percent stake in Lukoil, and plans to boost that to 20 percent, so the $1.4 billion in quarterly profit for Lukoil is encouraging to those who say Russia’s huge reserves outweigh the shaky political situation.
Lukoil’s profit came on a revenue increase of 62 percent, to $9.8 billion. Lifting costs were just $2.57 in the quarter, but transport charges rose 40 percent to $2.1 billion, while income taxes jumped 94 percent to $554 million for the period, and various export and excise taxes and tariffs added $1.5 billion in costs, up 89 percent.
—Allen Baker
Plains buys another U.S. pipeline from Shell Plains All American Pipeline said Jan. 12 that it acquired south Louisiana crude oil pipeline assets from Shell Pipeline for about $12 million. Last year Plains purchased the Capline and Link pipelines from Shell.
“These Shell assets fit extremely well with our existing operations in the area and enhance our ability to service our producer and refinery customers in south Louisiana,” said George R. Coiner, Plains’ senior group vice president.
He said Plains intends to spend about $8 million during 2005 to modify and improve the south Louisiana assets so they can be integrated into the company’s existing pipeline base.
The primary assets include the Terrebonne Bay Gathering System, Bay St. Elaine Pipeline, Cocodrie to Houma pipeline, Cocodrie Station, Golden Meadow Gathering System, Turtle Bayou Gathering System, and Patterson Station.
CIG applies for expansion of Colorado line
El Paso subsidiary Colorado Interstate Gas has filed an application with the U.S. Federal Energy Regulatory Commission to construct a $61-million pipeline expansion from Colorado’s Raton Basin to Mid-continent delivery systems in southcentral Colorado and the Oklahoma panhandle, the company said Jan. 11.
The so-called Raton Basin 2005 Expansion Project, which would add 104,600 dekatherms per day of natural gas transmission capacity, includes 102 miles of 16-inch, 20-inch, and 24-inch pipeline looping, 1,770 horsepower of additional compression, as well as new metering facilities.
With the expansion, CIG would have more than 380,000 dekatherms of daily firm delivery capacity available to producers in the Raton Basin.
Pioneer Natural Resources, El Paso Energy Raton, Red River Ranch Holding, Apple Tree Holdings, and XTO Energy have signed firm agreements to use the pipeline. Pipeline construction is expected to last four months, with initial service scheduled to begin Oct. 1.
—Ray Tyson
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