U.S. BRIEFS

Dec. 16, 1991
VALERO NATURAL GAS PARTNERS LP, San Antonio, plans a $30.9 million, 200 MMcfd turboexpander gas processing plant near Thompsonville, Tex. Construction is to begin in January and be complete in first quarter 1993. The plant will have capacity to produce 10,000 b/d of ethane and other natural gas liquids. The new plant and Valero's expansion at its Freer, Tex., plant (OGJ, July 29, p. 46), will increase its NGL output by 25%.

GAS PROCESSING

VALERO NATURAL GAS PARTNERS LP, San Antonio, plans a $30.9 million, 200 MMcfd turboexpander gas processing plant near Thompsonville, Tex. Construction is to begin in January and be complete in first quarter 1993. The plant will have capacity to produce 10,000 b/d of ethane and other natural gas liquids. The new plant and Valero's expansion at its Freer, Tex., plant (OGJ, July 29, p. 46), will increase its NGL output by 25%.

PETROCHEMICALS

UNION CARBIDE CORP. let contract to Jacobs Engineering Group Inc., Pasadena, Calif., for engineering services for an $11 million environmental project at its petrochemical complex at Taft, La. Work includes replacing open earthen emergency and equalization basins with closed tanks for wastewater storage. Jacobs will build wastewater storage tanks, pumps, and piping. Project is to be complete by yearend 1992.

EXXON CHEMICAL AMERICAS let contract of undisclosed value to Jacobs for engineering, design, and procurement for revamp and upgrade of aromatics units, built in the 1940s, at Exxon's Baytown petrochemical complex. The 18 month project calls for a new fractionation train, retraying columns, furnace debottlenecking, heat exchanger reratings, and other process equipment modifications.

UNOCAL CORP. agreed to purchase most of Chevron Chemical Co.'s nitrogen fertilizer business for an undisclosed price. The deal, to be complete in early 1992, includes manufacturing and storage facilities in Kennewick and Finley, Wash., and a toll processing agreement for products from a Richmond, Calif., fertilizer plant. Unocal plans to manufacture nitrogen fertilizer upgraded products at Kennewick and use Finley for storage and terminating.

ACQUISITIONS

SANTA FE ENERGY RESOURCES INC., Houston, and Adobe Resources Corp., New York, signed a definitive agreement to merge, subject to shareholder approvals. The merger is expected cut overhead costs more than $15 million/year for the combined companies and lower debt to equity ratio. Value of the deal is not disclosed.

PG&E RESOURCES CO., Dallas, completed purchase of Tex/Con Oil & Gas Co., Houston, for about $400 million from BP Exploration Inc. (OGJ, Oct. 21, p. 39). The two companies will be consolidated and operated from Dallas, and about 100 Tex/Con employees will join PG&E.

TRI TEXAS INC., Dallas, arranged financing with Summit Partners Management Co., Dallas, for as much as $28 million to fund its cash offer of $161/share for Home-Stake Oil & Gas Co. stock and $248/share for Home-Stake Royalty Corp., both of Tulsa. The offer expires Dec. 23. Tri Texas holds about 24% of HSOG stock and 18% of HSRC stock with options to acquire more. Home-Stake filed suit Dec. 6 to block the acquisition.

COMPANIES

PHILLIPS PETROLEUM CO. will take a writedown of about $244 million after tax on investments in the Point Arguello oil field off California. It is the company's second writedown on the project (OGJ, Jan. 22, 1990, p. 30). The writedown will be partially offset by gains of $259 million for replacement cost property insurance and $33 million for final settlement of business interruption insurance claims.

BURLINGTON RESOURCES INC., Seattle, plans to spin off its El Paso Natural Gas Co. unit through an initial public offering of as much as 20% of El Paso common stock. Meridian Oil Holding Inc. will remain a unit of Burlington. Plan execution hinges on favorable market conditions and board approval.

MOBIL CORP. cut its 1991 capital budget by about $500 million, or about 10%, from the original plan. Mobil cited economic recession in the U.S. and in key international markets and continued low gas prices in the U.S.

SHELL OIL CO. projects 1992 capital and exploration spending of $2.7 billion, down about $400 million from estimated 1991 figures. About 55% of total 1992 spending is earmarked for exploration and production, a cut of $450 million from estimated 1991 outlays to be felt mainly in U.S. operations. Oil products spending is expected to increase to $850 million in 1992 from $750 million in 1991.

SUN CO. approved 1992 capital spending of $794 million, down 4% from the approved 1991 capital program but a modest increase from projected 1991 spending of about $750 million. International E&P spending for 1992 is budgeted at $100 million, down from $135 million budgeted in 1991. The 1992 budget calls for spending $365 million on refining and marketing, an increase from the $340 million budgeted in 1991.

ENSERCH CORP., Dallas, approved a $156 million capital spending budget for 1992, down from about $210 million in 1991. E&P spending is budgeted at about $71 million, down 40% from estimated 1991 E&P spending. Enserch expects oil and gas prices will remain low and said higher prices could spur increased spending. Natural gas transmission and distribution budget for 1992 is $72 million vs. $73 million in 1991.

UNOCAL CORP. will restructure its corporate headquarters including cuts of about 85 positions, expected to yield savings of more than $20 million/year. Unocal said the sale of major company assets in recent years has changed Unocal's business focus, in turn affecting corporate support needs.

ORYX ENERGY CO., Dallas, will take a special one time charge of $35 million after tax due to its restructuring plan (OGJ, Oct. 21, p. 32). Oryx expects to record an overall net gain from its divestment program, including costs of its staff reductions. The program is to be complete by summer 1992.

AMERADA HESS CORP., New York, agreed to supply 18.32 MMcfd of gas to South Jersey Gas Co., Folsom, N.J., beginning Nov. 1, 1992, under a 15 year agreement. South Jersey will use the systems of Texas Gas Transmission Co., CNG Transmission Corp., and Transcontinental Pipeline Corp. to transport the gas to its service area. Amerada also will supply South Jersey with 3 MMcfd of gas from Dec. 1 until the end of February under a separate contract.

KOCH INDUSTRIES INC., Wichita, completed purchase of the marine terminal and related pipelines and oil gathering systems from Ashland Oil Inc.'s Scurlock Permian Corp. unit for $21 million (OGJ, Nov. 4, p. 39).

MG CORP., New York, subsidiary of Metallgesellschaft AG, Frankfurt, Germany, purchased additional interests in Bishop Pipeline Corp., Houston. Under the agreement Bishop will change its name to MG Natural Gas Corp. and its activities will be expanded to include providing capital in the form of production payments to secure natural gas production commitments.

MARKETING

CHEVRON U.S.A. INC. introduced an 89 octane gasoline in California marketed as Chevron Plus Unleaded. It will replace regular leaded gasoline at Chevron's 1,600 stations and marine outlets in the state by Jan. 1, 1992. Chevron Plus will cost about 5/gal more than regular unleaded.

ARCO PRODUCTS CO. replaced its regular leaded gasoline in the Las Vegas area with EC-1 Regular, a reformulated gasoline that has methyl tertiary butyl ether added, reduced olefins and aromatics, and reduced benzene and sulfur. ARCO said the fuel will reduce air pollution from pre-1975 cars and pre-1980 trucks. ARCO dealers will pay the same price for the new fuel as for the regular leaded gasoline.

GETTY PETROLEUM CORP. leased 141 convenience food stores to Uni-Marts Inc. for 5 years and received $12.3 million for equipment and inventory. Getty will continue to supply gasoline to 109 leased stores and will supply about 80 million gal/year to 200 added Uni-Mart stores that will be rebranded as Getty.

CNG

TOTAL PETROLEUM/VICKERS and Natural Fuels Corp., Denver, opened a compressed natural gas refueling pump at a Total/Vickers store in Denver, kicking off a joint partnership to install CNG pumps at selected Total/Vicker stores along the Front Range of the Rocky Mountains. The program will begin with 12 stations in Colorado in 1992. CNG will be sold at a gasoline equivalent of 64.9/gal.

ATMOS ENERGY CORP., Dallas, opened Louisiana's first retail CNG fueling facility in Lafayette (OGJ, Aug. 19, p. 27). The Shell station is designed mainly to service fleet vehicles, and Atmos arranged for an automobile dealership in Lafayette to convert vehicles. Atmos is selling CNG at a gasoline equivalent of 70/gal, and the company said the number of fleet vehicles committed to using the facilities exceeded its forecast for the first year.

SOUTHERN UNION ECONFUEL CO., Austin, and C&R Co., El Paso, Tex., will open five CNG fuel stations in El Paso the next 18 months. The two agreed to jointly develop and operate the stations.

SPILLS

WASHINGTON STATE DEPARTMENT OF ECOLOGY fined U.S. Oil & Refining Co., Tacoma, Wash., and Texaco Refining & Marketing Inc. for oil spills that occurred earlier this year. U.S. Oil was fined $45,000 for a 600,000 gal spill that occurred Jan. 6 when a 16 in. pipeline broke. Texaco was fined $20,000 for a 210,000 gal spill resulting from failure of a crude oil booster pump Feb. 22. In September the state ordered the two to submit plans on future spill prevention (OGJ, Sept. 23, p. 14).

DRILLING-PRODUCTION

SEN. DON NICKLES (R-Okla.) is urging the Federal Energy Regulatory Commission to declare the Pennsylvanian Cherokee in western Oklahoma a tight sandstone, qualifying gas production from the zone for a federal income tax credit. FERC has declined to give the Cherokee the designation in Oklahoma, although it approved the zone in adjacent Texas counties. In Oklahoma, the Cherokee is located in Beckham, Custer, Washita, and Roger Mills counties.

PARKER & PARSLEY PETROLEUM CO., Midland, Tex., signed a definitive agreement to purchase Mobil Producing Texas & New Mexico Inc.'s interests in about 600 oil and gas wells and development rights in the Permian basin for about $128 million (OGJ, Nov. 18, p. 48). The deal is to be complete by Dec. 20. The purchase includes interests in Germania, Preston, and Shackelford units, Ackerly/Dean field, Iatan East Howard field, and Sharon Ridge field secondary recovery projects.

AMERICAN EXPLORATION CO., Now York, 2 Branex-American appraisal well in Gaines County, Tex., Stockyard field flowed 140 b/d of 35 gravity oil from two zones in Permian Clearfork at 6,580-6,606 ft. The well cut 82 ft of net pay in eight zones. American plans multiwell development in the field, where it holds 31% interest in about 1,900 acres.

PLAINS RESOURCES INC. began retesting 1 Miami Fee well in Cameron Parish, La., to learn why it lost 750 psi of flowing tubing pressure in 5 days while producing 25 MMcfd of gas and 1,600 b/d of condensate from Tertiary Vicksburg at 15,310-15,640 ft (OGJ, Nov. 4, p. 87). The well's shut-in tubing pressure also fell to about 8,760 psi from 10,764 psi. Plains started sales from 1 Miami Fee on Nov. 12.

KELT ENERGY INC., Houston, purchased interests in producing leases in the Los Angeles basin near Torrance, Calif., and about 17 surface acres from Santa Fe Energy Partners LP, Houston, for $8 million. Net production from the leases is about 450 b/d.

REFINING

MOBIL OIL CORP let contract to NDE Environmental Corp., Torrance, Calif., to leak test its Torrance, Calif., refinery pipelines using NDE's proprietary acoustic leak detection/pinpointing system. NDE expects revenues under the contract to be about $400,000 the next 12 months.

PIPELINES

CITIZENS UTILITIES CO. received approval from the Arizona Corporation Commission to purchase the natural gas distribution system of Southern Union Gas Co., Austin, Tex., for about $41 million. The system provides service to most of northern Arizona, including parts of Mohave, Coconino, Yavapai, Navajo, and Apache counties.

EL PASO NATURAL GAS CO. let contract to John Brown Engineers & Constructors for a 400 MMcfd expansion of Window Rock and Navajo compressor stations in northeastern Arizona on El Paso's San Juan mainline to California. Work has begun on the $10 million turnkey project, which is to be complete in spring 1992.

COGENERATION

A TEXACO INC. unit purchased the 50% interest in Nevada Cogeneration Associates #2 from partner Bonneville Pacific Corp., Salt Lake City for undisclosed sum. Principle asset of the partnership is the 85,000 kw Black Mountain cogeneration project near Las Vegas (OGJ, May 27, p. 46).

COURTS

A FEDERAL MAGISTRATE recommended USX Corp. pay $409 million to former shareholders of Marathon Oil Co. to settle a 9 year dispute stemming from USX's purchase of Marathon. It is the sole remaining issue in a lawsuit filed by Marathon shareholders that alleged the former U.S. Steel wrongly accepted certain Marathon shares in conjunction with the tender offer. The ruling will be forwarded to a U.S. District Judge for further action.

Copyright 1991 Oil & Gas Journal. All Rights Reserved.