Daily Archives: April 19, 2012

Recap: Worldwide Field Development News (Apr 13 – Apr 19, 2012)


This week the SubseaIQ team added 7 new projects and updated 41 projects. You can see all the updates made over any time period via the Project Update History search. The latest offshore field develoment news and activities are listed below for your convenience.

Delek Group Updates Ops on Pinnacles Well
Apr 16, 2012 – Delek Group reported that the development plan of Pinnacles No.1 well has been approved based upon operator’s conclusion of the existence of a natural gas reservoir. The $100 million-budget has been approved, of which $30 million is for exploration and drilling. A full reservoir update report is expected to be released after the development well is complete, which is expected in July 2012.
Europe – North Sea
Athena Field Nearing First Oil
Apr 19, 2012 – The BW Athena FPSO has arrived on location at the Athena field in the North Sea. The vessel was connected to the STP mooring buoy, with hook-up and ongoing infield commissioning activities. Ithaca Energy said that a further announcement will be made upon delivery of first oil from the field.
Project Details: Athena
Xcite Sets Out Bentley Field Work Program
Apr 19, 2012 – Xcite Energy has outlined its plans for Bentley’s Phase 1A work program. Xcite said that the well, which was spud on March 18, 2012, with a 20-inch casing has now been set down to approximately 2,000 feet (610 meters) below the rotary table. Preparations are being made to set the blowout preventer and to continue the drilling of the 17.5-inch hole. The company added that it has invested significant resources designing and engineering the next phases in the development of the Bentley field, and the Phase 1A and Phase 1B work programs.
Project Details: Bentley
Ithaca Preps to Drill Hurricane Appraisal Well
Apr 19, 2012 – Ithaca Energy reported it will commence drilling the Hurricane appraisal well later this year. The spud date is later than originally anticipated due to delays in the drilling program being performed for other operators, prior to the contracted rig being moved to the Hurricane well location. It is estimated Hurricane holds gross 3P reserves volume of 13 MMboe.
Project Details: Hurricane
Providence IDs Two Prospects in LO 11/12
Apr 19, 2012 – Providence Resources believes it has identified two gas prospects approximately 45 miles off the west coast of Ireland, and close to Shell‘s Corrib gas field. Providence said that an initial technical evaluation of Licensing Option 11/12 has revealed the presence of two prospects in the Slyne Basin that it has called “Kylemore” and “Shannon” – both similar in age to the Corrib field. The Kylemore prospect is interpreted as a mid-basinal inverted four-way dip-closed anticline based on a combination of 2D and 3D seismic data. The most recent mapping of the Kylemore prospect indicated that it is structurally directly analogous to the Corrib gas field, with volumetric analysis based on available maps indicating potential gas in place of up to 228 billion standard cubic feet. The Shannon structure, which was drilled by Enterprise Oil in 1999, demonstrates significant structural closure covering around 9 square miles, the LO 11/12 partners believe that Shannon warrants a complete reevaluation in the context of any remaining resource potential. The company plans to apply modern seismic processing technologies to the available 3D seismic data in order to better quantify any remaining resource potential in the area.
Project Details: Shannon
Total Spuds Relief Well, Preps Well Kill at Elgin
Apr 18, 2012 – Total has sent a team of engineers to its Elgin platform to conduct further preparations for work needed to end an ongoing natural gas leak. In addition to the well-kill operation, the operator has begun drilling one of two planned relief wells.
Project Details: Elgin/Franklin
Dana Spuds Platypus Appraisal Well
Apr 17, 2012 – Dana has spud an appraisal well on the Platypus gas field in the UK sector of the North Sea. The Rotliegendes gas accumulation at Platypus was discovered in 2010 by the Dana Petroleum plc operated 48/1a-5 well, which encountered 218 vertical feet (66 meters) of gas bearing sands and has the potential to contain up to 180 billion cubic feet of gas in place. Drilling operations are being performed by the ENSCO 80 (250′ ILC) drilling rig. This well will be drilled horizontally through the Rotliegendes gas reservoir to confirm deliverability and is expected to be suspended for reuse as a gas producer.
Project Details: Platypus
Wintershall Hits Oil Pay in Skarfjell
Apr 16, 2012 – Wintershall has made an oil discovery at its Skarfjell prospect in the Norwegian sector of the North Sea. The wildcat well 35/9-7 found Upper Jurassic reservoir sands of “good quality” containing light oil with “a significant oil column” said the firm. So far, Wintershall added, the resource is estimated to range between 60 million and 160 million barrels of recoverable oil, although commercial viability, as well as potential further upside, will need to be confirmed through appraisal drilling. The primary exploration target of well 35/9-7 was to prove hydrocarbons in the Upper Jurassic reservoir rocks. The well was drilled by the Songa Delta (mid-water semisub) in a water depth of 1,237 feet (377 meters) in PL 418.
Project Details: Skarfjell
Norway Greenlights Lundin’s $4.2B Edvard Grieg Oil Field
Apr 13, 2012 – The Norwegian government has approved the $4.2 billion development of the Edvard Grieg (formerly Luno) oil field, the first field offshore Norway operated by Lundin Petroleum. The Edvard Grieg area contains 186 million barrels of oil equivalent, and peak production is expected to be 90,000 boepd. Production at Edvard Grieg will be combined with the production of the nearby Draupne, and studies are being made to find the best ways of exporting oil and gas from the Utsira Height area.
Project Details: Edvard Grieg (Luno, Draupne) Project
Framo Engineering to Design, Construct Gullfaks Subsea Gas Compression Plant
Apr 13, 2012 – Statoil has awarded Framo Engineering a contract for the design and construction of the Gullfaks subsea gas compression plant. The operator said that Gullfaks may become one of the first installations worldwide to employ subsea gas compression. The mature Gullfaks field is experiencing a decline in natural reservoir pressure, so the field may need boosting in the form of compression in order to produce more gas and bring the gas up to the platform. In 2011, Statoil and partner Petoro decided to choose a subsea solution as the preferred concept for gas compression some nine miles (15 kilometers) from the Gullfaks C platform. This may increase the production from the field by 3 billion cubic meters of gas, enabling Gullfaks to sustain plateau production for gas export. The current recovery rate on the field is 62 percent. A combination of subsea compression and conventional low-pressure production in a later phase may increase this to 74 percent. This is the first delivery by Framo Engineering to Statoil within engineering, procurement and construction (EPC) of subsea compression facilities. Contracts for platform modifications and marine operations in connection with the Gullfaks development will be awarded during the summer/autumn of 2012, subject to a positive investment decision.
Project Details: Greater Gullfaks Area
Lansdowne Updates Seismic Ops Offshore Ireland
Apr 13, 2012 – Lansdowne Oil & Gas has processed a 3D seismic survey over the Rosscarbery license area, including the Galley Head gas discovery and other prospects in the North Celtic Sea, offshore Ireland. Following interpretation of the 3D seismic, the Galley Head gas discovery is now interpreted by Lansdowne as having gross P50 in-place volume of 30 BSCF GIIP with 25 BSCF potentially technically recoverable. The Carrigaline gas discovery lies outside the area covered by the 2011 3D seismic survey and remains unchanged from the February 2011 CPR which calculated gross P50 in-place volume of 81.8 BSCF with P50 technically recoverable gas of 60.8 BSCF.
Project Details: Rosscarbery
Nexen Spuds Stingray
Apr 13, 2012 – Nexen spud the Stingray well on April 9 with results expected in May. The well is targeting a Jurassic sandstone reservoir in UK Block 15/13b.
Project Details: Stingray
Asia – SouthEast
BHP Billiton Requests SC55 Exploration Extension
Apr 16, 2012 – BHP Billiton has requested that the Department of Energy extend the current exploration sub-phase 4 of SC55 by 18 months. If approved by the DOE, this would extend the current contractual deadline to complete drilling of the commitment well from August 5, 2012 to February 5, 2014. The operator has requested this extension in order to secure an appropriate ultra deepwater rig with specialized well control equipment for drilling operations on the proposed Cinco prospect. No date has been set for drilling operations until a rig can be secured.
Project Details: Cinco
Premier to P&A Biawak Besar
Apr 13, 2012 – Premier Oil will plug and abandon its Biawak Besar-1x exploration well offshore Indonesia after it reached its targeted depth of 5,950 feet (1,814 meters) by the West Callisto jackup (400′ ILC). Although logs for the Biawak Besar-1x well showed better-than-expected sand quality, the sands were water wet. The results from the well will be incorporated into the firm’s existing 3D seismic database to determine the cause of the amplitude response and its implications for the future prospectivity of the targeted play.
Project Details: Biawak Besar
N. America – US GOM
Anadarko Further Appraises Heidelberg
Apr 19, 2012 – Anadarko has further appraised the Heidelberg discovery in the deepwater Gulf of Mexico after drilling two appraisal wells (GC 903-3 and GC 903-3ST1). The two wells were drilled in order to appraise the extension of the Heidelberg discovery made in 2009. The Heidelberg appraisal well GC 903-3 was drilled in a water depth of 5,260 feet (1,603 meters) and reached a total depth of 31,030 feet (9,460 meters) of measured depth. The well was sidetracked down dip (GC 903-3ST1 well) to a total depth of 30,440 feet (9,278 meters) of measured depth, indicating an oil water contact at approximately 700 feet (213 meters) deeper than the previous oil discovery well and significantly increasing the field’s aerial extent. Estimated recoverable resources could reach 200 million barrels of oil. Data is being evaluated in order to accelerate the overall sanctioning process for this project.
Project Details: Heidelberg
Asia – Caspian
Shah Deniz Enters Stage Two of Development
Apr 18, 2012 – The Shah Deniz project is entering the second phase of development with the commencement of FEED work. The Shah Deniz 2 project is set to produce 16 Bcm of gas per year. This stage of development, which lies some 43 miles (70 kilometers) offshore in the Caspian Sea, is expected to include two new bridge-linked production platforms; 26 subsea wells to be drilled with two semisubs; 311 miles (500 kilometers) of subsea pipelines built in 1,804 feet (550 meters) of water; a 16 bcma upgrade for the South Caucasus Pipeline (SCP); and expansion of the Sangachal Terminal. Further pipelines will be built and expanded to transport Shah Deniz gas through Turkey and Europe.
Project Details: Shah Deniz Project
RWE Dea to Acquire Seismic Data in Caspian Sea
Apr 17, 2012 – RWE Dea is set to begin its seismic acquisition program off the Turkmenian coast in the Caspian Sea on Block 23. A subsequent exploration well is scheduled for drilling in 2013. The operator stated that the survey will enable them to explore for geological structures in the Miocene and Pliocene at depths from 9,843 to 21,325 feet (3,000 to 6,500 meters). The seismic survey compromises the acquisition of 3D data in an area of 98,842 acres (400 square kilometers) and a 2D program to assess the further exploration potential of Block 23.
Africa – West
Anadarko Encounters Water-Bearing Reservoirs in Kosrou-1
Apr 19, 2012 – Anadarko has successfully drilled the Kosrou-1 well offshore Cote d’Ivoire. The well encountered water-bearing reservoirs with oil shows. The Kosrou-1 well targeted a channel system identified on the 3D seismic survey acquired in 2010. It intersected 295 feet (90 meters) of reservoir quality sandstones with oil shows in the primary target and over 394 feet (120 meters) in total in the well. The Eirik Raude (UDW semisub) drilled Kosrou-1 to a final depth of 17,195 feet (5,241 meters) in a water depth of 7,464 feet (2,275 meters). On completion of operations, the rig will return to the Paon-1 location to complete the drilling of that well. Paon-1 is a high impact prospect which is geologically independent from Kosrou.
Project Details: Kosrou
Anadarko Finds Oil Shows in Mercury-2
Apr 19, 2012 – Anadarko has successfully drilled the Mercury-2 appraisal well in Sierra Leone. The well encountered water-bearing reservoirs with oil shows. The Mercury-2 well, drilled 7 miles (12 kilometers) northwest of the Mercury-1 oil discovery, targeted an area where the extensive 3D seismic coverage indicated a high probability of finding thick reservoir quality sandstones. It intersected over 886 feet (270 meters) of reservoir quality sandstones which were water bearing with oil shows at this location. The Discoverer Spirit (UDW drillship) drilled Mercury-2 to a final depth of 16,870 feet (5,142 meters) in a water depth of 5,955 feet (1,815 meters).
Project Details: Mercury
YPF, Chevron Mulling Aje Development Options
Apr 18, 2012 – YPF reported that various development concepts have been evaluated for the Aje field but progress towards a development decision has been slow. This is due mainly to delays in securing a commercially viable gas sales contract through the West Africa Gas Pipeline. Four wells have been drilled to date on the Aje field. Aje-1 and -2 tested oil and gas condensate at high rates. Aje-4, drilled in early 2008, logged significant pay and confirmed the presence of four productive reservoirs. The Aje field has full 3D seismic coverage. The Aje field development is being managed by Chevron, as Technical Advisor to Nigerian operator Yinka Folawaiyo Petroleum.
Project Details: Aje
Harvest Natural Plans to Drill Well in Dassafu in 2012
Apr 17, 2012 – Harvest Natural Resources plans to drill an additional well in the Dussafu Ruche Marin field in 2012 after reviewing additional 3D seismic. Rig options are currently being reviewed. The operator is hoping to pinpoint future drilling and development activities in the license.
Project Details: Dussafu Ruche Marin
Tullow Oil Continues Development Ops at Jubilee
Apr 17, 2012 – Tullow reported that production from Jubilee in 2011 was lower than anticipated; however, this is being remediated through the installation of newly designed well completion equipment. The operator anticipates that the issue will be resolved this year allowing the field to achieve plateau production in 2013. Production will also be supported by Jubilee Phase 1A, which will include a total of eight additional wells. Phase 1A operations are expected to take around 18 months to complete at an estimated cost of $1.1 billion.
Project Details: Jubilee
Tullow Begins FEED Work on TEN Cluster Project
Apr 17, 2012 – In 2011, Tullow completed an exploration and appraisal program on the TEN cluster project enabling the beginning of FEED work. FEED work has commenced on the FPSO and subsea infrastructure options with a Plan of Development are expected to be submitted to the Government of Ghana in the third quarter of 2012. Tullow expects first oil to commence some 30 months after approval with combined production in the region of 100,000 bopd. Initial gas production will be split between export and re-injection to manage reservoir performance.
Project Details: The Ten Cluster
Tullow Oil Spuds Wawa-1 Well
Apr 17, 2012 – Tullow Oil has spud the Wawa prospect offshore Ghana. The West Leo (UDW semisub) is targeting hydrocarbons that may have moved to a trap up-dip from the Tweneboa-Enyenra-Ntomme oil and gas condensate fields. The water depth of the site is 1,939 feet (591 meters).
Project Details: Wawa
Chevron, Partners Sign Wheatstone LNG Agreement with Chubu
Apr 19, 2012 – Chevron and partners have agreed to sell LNG from the Wheatstone project in Western Australia to Chubu Electric Power Company. The Wheatstone partners and Chubu signed a heads of agreement to supply 1 million metric tons per annum (MTpa) of LNG for up to 20 years. Through its 13-percent share in Wheatstone, Apache Julimar Pty Ltd, an Apache subsidiary, will supply 0.13 MTpa to Chubu, or approximately 19 million cubic feet of natural gas per day. The heads of agreement is subject to completion of a binding LNG sales agreement. The Wheatstone partners earlier announced long-term agreements to sell LNG to Tokyo Electric Power and Kyushu Electric Power.
Project Details: Wheatstone
BHP Billiton Finds Gas in Tallaganda
Apr 18, 2012 – BHP Billiton has made a gas discovery in the Tallaganda-1 well, located in permit WA-351-P, of the Carnarvon Basin, Western Australia. The well reached a total depth of 14,321 feet (4,365 meters) in a water depth of 3,743 feet (1,141 meters). Preliminary analysis of the wire line log data and the recovery of gas from wire line sampling have confirmed a gas discovery was made in the Mungaroo formation. The preliminary interpretation of well results confirms that Mungaroo reservoir quality over the gas-bearing interval penetrated in the well is variable at this location on the Greater Tallaganda structure. Further analysis is required to assess the commercial viability of the project.
Project Details: Tallaganda
S. America – Brazil
Blue Water Grabs Sapinhoa FPSO Conversion Project
Apr 18, 2012 – Blue Water Shipping received a contract to provide logistics for materials and equipment to China and Brazil, where the conversion of the Cidade de Ilhabela FPSO is taking place. The FPSO is being converted from a tank vessel which is 1,312 feet (400 meters) long and 230 feet (70 meters) wide. After the conversion, the vessel will be the world’s largest FPSO. It will operate at the Sapinhoa field, formerly called Guara, offshore Brazil. The first part of the project takes place in China where the preliminary, basic changes of the tank vessel will be carried out. Subsequently the vessel will sail to SBM’s shipyard in Brazil where the final part of the conversion will take place. The entire conversion project is expected to be completed in 2014.
Project Details: Sapinhoa (Guara)
Petrobras Discovers Oil in Dolomita Sul
Apr 13, 2012 – Petrobras has discovered good quality oil at well 1-RJS-689A (1-BRSA-925A-RJS) to the north of the Lula field in the pre-salt area of the Santos Basin. Petrobras said the discovery confirms the potential of the pre-salt region beyond the limits of the first discoveries (pre-salt cluster). The well, which is still in the drilling phase, also seeks to accomplish deeper objectives. After drilling is completed, Petrobras will evaluate the productivity of these reservoirs through formation tests. The new well, informally known as Dolomita Sul, is located in a water depth of 5,732 feet (1,747 meters) in Block BM-S-42.
OGX Confirms Additional Light Oil in Santos Basin
Apr 13, 2012 – OGX reported that well 3-OGX-74-SPS, the first extension well of the Natal accumulation (1-OGX-11D-SPS), demonstrated the continuity of the sandstone reservoirs of the Santonian age. OGX verified the presence of light oil of 38 degree API, while well OGX-11D had previously confirmed the presence of gas and condensate. OGX-74 was drilled to a depth of 14,564 feet (4,439 meters) and, together with wildcat wells, OGX-11D and OGX-47, will be part of a Discovery Evaluation Plan which will appraise the sandstones of the Santonian age accumulations in Block BM-S-59.
Project Details: Natal
S. America – Other & Carib.
FOGL to Spud Loligo Prospect in June
Apr 17, 2012 – FOGL plans to spud the Loligo prospect, which is one of the highest impact exploration wells in their drilling program, in June 2012. The prospective resources of Loligo are 4.7 billion barrels. The Loligo complex comprises several reservoir objectives along with a number of various reservoir targets. The well is located in the Falkland Islands.
Project Details: Loligo

USA: Anadarko Completes Heidelberg Sidetrack Appraisal Well


Anadarko Petroleum Corporation today announced the Heidelberg sidetrack appraisal well in the deepwater Gulf of Mexico successfully confirmed an extension of up to 1,500 acres.

“The Heidelberg sidetrack appraisal well was successfully drilled and defined the down-dip limits of the Heidelberg field,” said Chuck Meloy, Anadarko Sr. Vice President, Worldwide Operations. “This well extends the oil/water contact down structure by approximately 700 feet, and continues to validate the field’s estimated resource range, while providing support for the option of a stand-alone development. Anadarko and Heidelberg’s co-owners have initiated pre-FEED (front-end engineering and design) work to evaluate development solutions with the objective of advancing commercialization of this emerging mega project.”

The Heidelberg sidetrack appraisal well in Green Canyon block 903 is located approximately 1.3 miles from the Heidelberg discovery well. The well was drilled to a total depth of approximately 30,440 feet in water depths of approximately 5,260 feet.

Anadarko operates Green Canyon block 903 with a 44.25-percent working interest. Co-owners in the block include Apache Deepwater LLC, a subsidiary of Apache Corporation (12.5 percent), Eni (12.5 percent), Statoil (12 percent), ExxonMobil (9.375 percent) and Cobalt International Energy, L.P. (9.375 percent).


New Law: Virginia will not cooperate with NDAA detention


Posted by Tenth Amendment

Contact: Mike Maharrey
Communications director
O: 213.935.0553

For Immediate Release:April 18, 2012

RICHMOND, Va. – On Wednesday, the Virginia legislature overwhelmingly passed a law that forbids state agencies from cooperating with any federal attempt to exercise the indefinite detention without due process provisions written into sections 1021 and 1022 of the National Defense Authorization Act.

HB1160 “Prevents any agency, political subdivision, employee, or member of the military of Virginia from assisting an agency of the armed forces of the United States in the conduct of the investigation, prosecution, or detention of a United States citizen in violation of the United States Constitution, Constitution of Virginia, or any Virginia law or regulation.”

The legislature previously passed HB1160 and forwarded it to Gov. Bob McDonnell for his signature. Last week, the governor agreed to sign the bill with a minor amendment. On Wednesday, the House of Delegates passed the amended version of the legislation 89-7. Just hours later, the Senate concurred by a 36-1 vote.

Bill sponsor Delegate Bob Marshall (R-Manassas) says that since the legislature passed HB1150 as recommended by the governor, it does not require a signature and will become law effective July 1, 2012.

Several states recently passed resolutions condemning NDAA indefinite detention, but Virginia becomes the first state to pass a law refusing compliance with sections 1021 and 1022.

“In the 1850s, northern states felt that habeas corpus was so important that they passed laws rejecting the federal fugitive slave act. The bill passed in Massachusetts was so effective, not one single runaway slave was returned south from that state. Today, Virginia joins in this great American tradition,” Tenth Amendment Center executive director Michael Boldin said. “When the federal government passes unconstitutional so-called laws so destructive to liberty – it’s the people and the states that will stand up and say, ‘NO!’ May the other states now follow the lead taken today by Virginia.”

For more information on the new Virginia law, click HERE.


The Tenth Amendment Center exists to promote and advance a return to a proper balance of power between federal and State governments envisioned by our founders, prescribed by the Constitution and explicitly declared in the Tenth Amendment. A national think tank based in Los Angeles, the Tenth Amendment Center works to preserve and protect the principle of strictly limited government through information, education, and activism.


Bayside Corp. Adds Texas Acreage


by  Bayside Corp.
Press Release
Wednesday, April 18, 2012

Bayside Corporation announced the acquisition of an oil and gas lease covering the Moody and West wells in Duval County, Texas.

Bayside, acting through its wholly owned subsidiary, has acquired 100 percent of oil and gas leases covering 181 acres and the existing 7 wells situated on the property. The wells have previously produced oil from Jackson Series sands (Government Wells and Loma Novia zones) between depths of 2,200 and 2,400 feet. The wells were shut-in when the previous operator passed away and have been sitting dormant since. The Company plans to rework and/or re-complete each well and return them to commercial production of oil. The lease may also afford the opportunity to drill additional development wells in the future on the property.

Gordon Johnson, the CEO of Bayside Corporation, stated, “This lease is adjacent to existing oil leases owned by the Company in Duval County and fits nicely into its ongoing rework and re-completion program. Work is planned to commence on the existing wells during the second quarter of this year. As we bring the wells on line and into production and the results become available we will be announcing the results of our efforts. Bayside Corporation is pleased to participate in the future cash flow from these properties.”


Cheap natural gas feeds chemical industry boom

By Zain Shauk
Published 08:02 p.m., Thursday, April 19, 2012

LAKE JACKSON – The shale boom’s bounty of cheap natural gas is fueling an industrial renaissance on the Texas coast, one that was in full focus Thursday as Dow Chemical announced the latest piece of a $4 billion expansion of its chemical operations in Southeast Texas.

The $1.7 billion plant Dow announced Thursday, one of four it plans to build or expand at its Freeport complex, is aimed at taking advantage of cheap natural gas produced from shale, which the company expects to be available for the long term.

“There is enough responsible supply that the market will be attractive for decades to come,” Dow CEO Andrew Liveris said in an interview with the Houston Chronicle.

The four plants would create more than 4,800 jobs at their construction peaks and would support up to 600 permanent jobs, with average salaries of $75,000, when completed.

The plants would not have been viable in the United States before the boom in production of domestic fossil fuels from shale, which has flooded markets with of cheap natural gas, he said.

“If you had told me 10 years ago I’d be standing up on this podium making this announcement, I would not have believed you,” Liveris said, flanked by Gov. Rick Perry and Lt. Gov. David Dewhurst during an announcement Thursday at Brazosport College.

“Even though Texas had its great mechanisms to attract business, the cost of energy, the cost of feedstocks, which would have been the price of oil and the price of gas, was pricing the United States out of the market,” he said. But the shale “miracle” changed that.

The main attraction Thursday was Dow’s plan for an ethylene cracker that will convert natural gas and its liquid byproducts, such as propane, butane and ethane, into building blocks of plastics used in water bottles, vinyl and other items.

Others are eager

Other chemical companies also are betting on bountiful supplies of natural gas.

Chevron Phillips said this month it will build a $1 billion chemical plant at its Baytown facility, largely because of cheap natural gas liquids.

Shell is evaluating plans to build a major plant in Pennsylvania, which also would leverage cheap liquids to produce chemicals used in a broad array of products.

Liveris said natural gas would have to rise to above $10, with oil prices remaining above $100, to cause concerns about a return on its investment.

In trading Thursday on the New York Mercantile Exchange, natural gas fell 4.4 cents to $1.907 per million British thermal units.

Dow believes a substantial jump in gas prices is unlikely, unless the government allows a surge in liquefied natural gas exports or offers dramatic subsidies to encourage greater use of natural gas-fueled cars.

“There’d be a lot more than just us screaming from every corner of Washington and state legislatures that get involved with that,” Liveris said.

Keeping it at home

Liveris argued that gas should not be exported on its own but used to produce products for export at higher values.

“Why don’t we take this gas and create 15 to 20 times value added and not export it as liquid but export is as solid?” he asked.

Perry said the Texas Enterprise Fund will invest $1 million in the new Dow facility. The total is less than a tenth of 1 percent of the plant’s overall costs, but Perry said the investment played into the company’s decision to locate the plant in Texas.

“They can go everywhere in the world,” he said. “They’re not coming here just because we have great weather – in April and May. They’re not coming here just because we’ve got great music and great barbecue. They’re coming here just because they know this is the type of environment that they want to be associated with. This is the place they want to do business.”

Liveris called Texas’ partnerships with businesses an example for the nation to follow.

“I know when I get red carpet, and I know when I get red tape,” Liveris said. “And I get red carpet in the state of Texas.”

While the Texas Enterprise Fund was a small factor, the plant’s location will allow for it to be integrated easily with Dow’s existing facilities in the area, said Jim Fitterling, Dow’s president of feedstocks, energy and corporate development.

Dow, based in Midland, Mich., expanded its operations to the Texas coast 70 years ago and has maintained a strong presence ever since. The new plants will make Freeport Dow’s largest petrochemical complex and one of the world’s biggest, Liveris said.

zain.shauk@chron.com twitter.com/ZainShauk


%d bloggers like this: