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Kiewit-Kvaerner JV Work on Exxon’s Hebron GBS in Canada

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Kiewit-Kvaerner Contractors joint venture, has been authorized by ExxonMobil Canada Properties (EMCP) to proceed with work on the Hebron Project gravity based structure (GBS) project offshore Newfoundland and Labrador, Canada.

The authorization comes after the substantial completion of front end engineering and design services and awards the next phase, which includes detailed engineering, procurement and construction (EPC) related services. Kvaerner estimates its share of this work to be approximately USD 125-150 million.

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Hebron is a heavy oil field estimated to have 400 – 700 million barrels of recoverable resources. The field was first discovered in 1981, and is located offshore Newfoundland and Labrador in the Jeanne d’Arc Basin 350 kilometres southeast of St. John’s, the capital of Newfoundland and Labrador. It is approximately 9 kilometres north of the Terra Nova project, 32 kilometres southeast of the Hibernia project, and 46 kilometres from the White Rose project. The water depth at Hebron is approximately 92 metres.

The Hebron field will be developed using a stand-alone concrete GBS. The GBS will consist of a reinforced concrete structure designed to withstand sea ice, icebergs, and meteorological and oceanographic conditions at the offshore Hebron Project Area. The preliminary GBS concept has a single main shaft supporting the topsides, encompassing all wells.

The Hebron co-venturers are: ExxonMobil Canada Properties (36%), Chevron Canada Resources (26.7%), Suncor Energy Inc. (22.7%), Statoil Canada (9.7%) and Nalcor Energy (4.9%).

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BW Gas, InterEnergy Form JV to Build LNG Terminal in Dominican Republic

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BW Gas and InterEnergy Holdings have agreed to form a joint venture to build a Liquefied Natural Gas (LNG) terminal in San Pedro de Macoris, in the Southeastern coast of the Dominican Republic.

The terminal will be part of an all-encompassing logistics solution to bring natural gas to the country.

This will be BW’s first investment in the Caribbean.  BW said it strongly believes in the future of the Dominican energy market and in the opportunity to partner with InterEnergy to bring a more economical and efficient fuel solution to the country’s power generators and other consumers of natural gas.

According to Celso Marranzini, Dominican Government Minister and CEO of the Dominican state’s electric sector holding company, Corporación Dominicana de Empresas Electricas Estatales (CDEEE), “This announcement is one of the most important developments in the country’s energy market in the last decade.”   Mr. Marranzini also pointed out that “the project confirms the significant and sustained interest by large international groups like BW and InterEnergy to invest in the Dominican Republic and, more specifically, in its power sector.”

The joint venture leverages on BW’s unparalleled knowledge of the gas transportation and storage business, and InterEnergy’s unique power sector experience and extensive footprint in the Dominican Republic. The combination of the two partners has proven to be critical to secure long term gas contracts from multiple suppliers and lock in the most competitive gas rates in the market.

BW Group CEO Andreas Sohmen-Pao says: “BW is very excited to partner with InterEnergy Holdings and its market leading companies in the power sector to bring a compelling energy solution to such an important and growing market like the Dominican Republic.

For InterEnergy, the venture also has significant strategic value given the group’s investments in the Dominican power generation and distribution segment, including integrated utility CEPM serving the Punta Cana and Bavaro resort regions, 300MW generation facility CESPM and generation company EGE Haina.

Rolando Gonzalez Bunster, InterEnergy’s Chairman and CEO adds: “This project reinforces our long term commitment to bringing reliable and cost-effective electricity to the Dominican market by continuing to deploy significant capital in the country, and partnering with global industry leaders like BW.

Total investments are expected to surpass US$350 million, and completion is scheduled for 2014. Anchor clients for the new terminal, in addition to companies related to InterEnergy, include the Martí Petroleum Group. Marti’s Tropigás division is a leading propane and natural gas distribution business in the Dominican Republic with over 3,000 industrial, commercial and residential propane clients and nearly two-thirds of the local natural gas distribution market.  Martí Petroleum Group is also one of the potential co-investors in the terminal, alongside other anchor clients that have been approached by BW and InterEnergy.

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USA: Total Enters Utica Shale JV with Chesapeake

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Total announced that its subsidiary, Total E&P USA, has signed and completed on December 30, 2011 an agreement to enter into a Joint Venture with Chesapeake Exploration, a subsidiary of Chesapeake Energy Corporation, and affiliates of its partner EnerVest Ltd.

In the agreement, Total acquires a 25% share in Chesapeake’s and EnerVest’s liquids-rich area of the Utica shale play located across 10 counties on the eastern side of the state of Ohio, USA.

Yves-Louis Darricarrère, President, Total Exploration & Production, stated “Total is delighted to be building on our technical successes with Chesapeake in the Barnett Shale Joint Venture and to expand into the liquids-rich Utica Shale play in Ohio. This is consistent with our strategy to develop positions in unconventional plays with large potential and, in this case, with value predominantly linked to oil price. This joint venture will provide us with a material position in a valuable long-term resource base under attractive terms and with a top-class operator. Total is conscious of the environmental aspects linked to developing shale acreage and is confident in Chesapeake’s capacity to manage the Utica shale operations in a responsible manner, respecting the highest industry standards.

The transaction is effective as of November 1, 2011. Total has paid Chesapeake and EnerVest about USD 700 million in cash for acquiring these assets. Total will also be committed to pay additional amounts up to USD 1.63 billion over a maximum period of 7 years in the form of a 60% carry of Chesapeake and EnerVest’s future capital expenditures on drilling and completion of wells within the Joint Venture.

The Joint Venture covers approximately 619,000 net acres, of which 542,000 net acres are brought by Chesapeake and 77,000 net acres are brought by EnerVest. Total will acquire its 25% share from each of Chesapeake and EnerVest on identical terms, giving a total of 155,000 net acres. Chesapeake will operate the Joint Venture acreage.

As a result of the transaction, Total will also acquire a 25% share in any new acreage which will be acquired by Chesapeake in the liquids-rich area of the Utica shale play.

To date 13 wells have been drilled across the acreage with very promising results seen from each well in terms of productivity and liquid content. The Joint Venture plans to ramp up the drilling activities in the coming 3 years with 25 rigs planned to be mobilized by 2014 to fully appraise and develop the acreage. SEC production in Total’s share is expected to reach 100,000 barrels of oil equivalent per day by the end of the decade.

Additionally, Total, Chesapeake and EnerVest have agreed to jointly develop the construction of the necessary midstream facilities to export the production from this acreage.

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