U.S. BRIEFS

May 27, 1991
WILLIAMS FIELD SERVICES CO. started construction of a third train at its 360 MMcfd Milagro gas processing plant near Blanco, N.M. Contracts are in place for gathering and processing as much as 420 MMcfd of San Juan basin coal seam gas, a volume expected to increase to 500 MMcfd by 1992. The Milagro plant is part of the $136 million Manzanares Coal Seam Project, which includes a 120 mile gathering system and is to be complete in 1992.

GAS PROCESSING

WILLIAMS FIELD SERVICES CO. started construction of a third train at its 360 MMcfd Milagro gas processing plant near Blanco, N.M. Contracts are in place for gathering and processing as much as 420 MMcfd of San Juan basin coal seam gas, a volume expected to increase to 500 MMcfd by 1992. The Milagro plant is part of the $136 million Manzanares Coal Seam Project, which includes a 120 mile gathering system and is to be complete in 1992.

PIPELINES

TEXAS EASTERN TRANSMISSION CORP. agreed to pay a $5.3 million fine to Pennsylvania and clean up 19 sites, resolving all issues with the state's Department of Environmental Resources over burial of polychlorinated biphenyls. The state estimates Tetco's total costs in penalties, cleanup, and monitoring during a 10 year period at $218 million. Tetco earlier put its PCB cleanup costs at about $400 million system-wide.

MOHAVE PIPELINE OPERATING CO. let a $5 million contract to Fluor Daniel for construction management services on Mojave Pipeline Co.'s 379 mile, 1.1 bcfd pipeline from Topock, Ariz., to Bakersfield, Calif. Construction was to begin this month with completion scheduled for first quarter 1992. Mohave is designer/builder/operator for Mojave Pipeline and part of the California portion of the Kern River Gas Transmission Co. pipeline from Wyoming to California. The two systems are to join near Daggett, Calif.

KN ENERGY INC., Lakewood, Colo., will extend its 64 mile Texas-Oklahoma Buffalo Wallow pipeline 21-1/2 miles from Aledo, Okla., to Transok Inc.'s Thomas, Okla., gas processing plant. The spur will terminate 1 mile from Oklahoma Natural Gas' intrastate system, and a future connection would provide ONG access to West Coast gas markets.

REFINING

AMOCO OIL CO plans to add a 20,000 b/sd residuum oil supercritical extraction (ROSE) unit to its bottoms upgrading complex at its Texas City, Tex., refinery, marking the first time a ROSE unit has been combined with an existing LC-Fining upgrading unit to convert resid.

DRILLING-PRODUCTION

FREEPORT-MCMORAN INC., New Orleans, began production of 18,000 b/d of oil and 40 MMcfd of gas from its A platform on West Delta Block 89 in 210 ft of water about 80 miles southeast of New Orleans in the Gulf of Mexico. The platform has 18 producers, four water injectors, and two water source wells. Partners with operator Freeport-McMoRan 40.6% are Amoco Production Co. 25.8%, Northwestern Mutual Life Insurance Co. 13.5%, and others 20.1%.

ENRON GAS SERVICES purchased a production payment from Zilkha Energy Co., Houston, for $24 million, including interests equal to about 17 bcf of gas. The reserves will be produced from 10 fields off Texas and Louisiana. Zilkha will be responsible for operating costs. Enron has an option to buy more reserves from those fields under a 5 year contract. Enron will transport and sell all gas under the agreements.

NUEVO ENERGY CO., Houston, will purchase reserves of about 1 million bbl of oil and 24 bcf of gas from Kilroy Company of Texas Inc., also of Houston, for an undisclosed sum. The purchase includes onshore and state offshore oil and gas leases in Texas and South Louisiana. Current production from the leases is 950 b/d of oil and 15 MMcfd of gas. Expected closing date is May 31.

COGENERATION

A JOINT VENTURE of Bonneville Nevada Corp. and Texaco Clark County Cogeneration Co. started building a $100 million, 85,000 kw, gas fired cogeneration plant near Las Vegas (OGJ, Nov. 12, 1990, p. 46). The plant has a 30 year contract to provide power to Nevada Power Co. It is to be complete in mid-1992.

PETROCHEMICALS

MOBIL CHEMICAL CO. completed a $50 million expansion of its Beaumont, Tex., polyethylene plant, increasing capacity by 70% to 1.7 billion lb/year, almost six times its 1977 startup capacity of 300 million pounds/year. Mobil Chemical's olefins plants at Houston and Beaumont supply ethylene feedstock.

GOVERNMENT

MINERALS MANAGEMENT SERVICE issued a final rule, detailed in the May 13 Federal Register, allowing it to assess an emergency civil penalty of $20,000/day for failure to comply with its rules governing petroleum activity on the Outer Continental Shelf. MMS could assess the penalty without first providing notice and time for corrective action for cases in which failure to comply amounts to a threat to life, property, or mineral deposits.

ECONOMIC REGULATORY ADMINISTRATION withdrew a proposed consent order under which Occidental Petroleum Corp. would have paid $205 million for alleged violations of oil pricing and allocation rules during October 1979-January 1981 by Cities Service Oil & Gas Co., which Oxy later acquired. After it reviewed comments at a hearing on the proposed agreement, ERA unsuccessfully tried to renegotiate the proposed consent order with Oxy.

LOUISIANA'S Department of Wildlife and Fisheries agreed to consider lowering fees for 3-D seismic surveys in state designated red lined oyster seed waters. Presently, Louisiana requires advance payments of $200-1,000/mile for reflective or refractive cable surveys, depending on water depth, which can account for as much as 40% of the cost of some 3-D programs.

OKLAHOMA CORPORATION COMMISSION banned drilling and seismic activity within 500 ft of Superfund sites or hazardous waste facilities in the state. The rules are take effect July 1, subject to approval by the governor and state legislature.

EXPLORATION

MINERALS MANAGEMENT SERVICE plans a Navarin basin offshore lease sale in September. Sale 107 would offer 3,263 blocks totaling 18.4 million acres. The area is about 50 miles off St. Matthew Island and 250 miles off the Alaskan mainland. Water depths are generally less than 600 ft. A 1984 sale in the basin resulted in 163 leases, of which 19 are still active. Eight wildcats were drilled, but no discoveries were announced.

TANKERS

U.S. COAST GUARD plans to propose a rule requiring tank level or pressure monitoring of tankers carrying oil, implementing a requirement of an oil spill law passed last year. In a May 7 Federal Register notice, the Coast Guard asked for comments regarding scope and requirements of the proposed rulemaking.

Copyright 1991 Oil & Gas Journal. All Rights Reserved.