INDUSTRY BRIEFS

May 4, 1992
VALERO NATURAL GAS PARTNERS LP, San Antonio, completed an $11.5 million expansion of its Freer, Tex., gas processing plant. Installation of a 110 MMcfd turboexpander increased charge capacity to more than 300 MMcfd of gas and recovery of natural gas liquids to more than 8,000 b/d. The expansion also increased Valero's company-wide gas processing capacity by 10%.

GAS PROCESSING

VALERO NATURAL GAS PARTNERS LP, San Antonio, completed an $11.5 million expansion of its Freer, Tex., gas processing plant. Installation of a 110 MMcfd turboexpander increased charge capacity to more than 300 MMcfd of gas and recovery of natural gas liquids to more than 8,000 b/d. The expansion also increased Valero's company-wide gas processing capacity by 10%.

TRANSPORTATION

ARCO CHINA INC. let contract for engineering, procurement, and project support services for two subsea pipelines for its $1.2 billion Yacheng gas field development project off China to J.P. Kenny's Houston office. Included are a 480 mile pipeline from ARCO's Yacheng 13-1 gas field to Hong Kong and a 60 mile pipeline from Yacheng to Hainan Island (OGJ, Mar. 16, Newsletter). Yacheng gas will be used for power generation in Hong Kong, among other uses.

Union Carbide Industrial Gases Inc.'s Linde division plans to double the length of its Houston-Texas City hydrogen pipeline network to more than 150 miles and increase hydrogen supply capability 70% to more than 100 MMcfd. The project is tied to a new contract to supply hydrogen to Star Enterprise at Port Arthur, Tex., and addition of a third hydrogen source through a long term contract with Lyondell Petrochemical Co. Linde expects to complete the expansion this year.

DEN NORSKE STATS OIJESELSKAP AS let a $200 million pipe coating contract to British Pipe Coaters Ltd. (BPCL), Edinburgh, a unit of Bredero Price. BPCL claims it is the largest single coating contract. The 660 km of pipe will be used in construction of the 40 in. Europipe system that will transport gas from Norway's Sleipner field to Germany. Coating will take place at Farsund on Norway's southern coast. The asphalt enamel coating will average 7 mm in thickness under concrete weight coating 75-115 mm thick.

UNICORP ENERGY CORP., Toronto, put up for sale its natural gas distribution unit, Union Energy Inc. Union, a major gas distributor in southern Ontario, has revenues of about $1.2 billion (Canadian)/year. Unicorp estimates value of the unit at $700 million. The company hired ScotiaMcLeod Inc., Toronto, and Goldman Sachs & Co., New York, as advisers in the sale.

GREEK OWNED Katina P tanker spilled about 114,000 bbl of heavy fuel oil before sinking off the coast of Mozambique (OGJ, Apr. 27, p. 30). Joao Sitoe, Mozambique's deputy director of shipping, said a much greater volume of fuel oil sank with the tanker and should solidify. He said a 120 sq mile slick formed near the site and probably will hit South Africa's coast. Mozambique's beaches were soiled by the spill, but Associated Press reported environmental damage was relatively minor.

INDIAN OIL CORP. plans to install a second single point mooring system at Salaya off Kutch, India, to boost crude oil offloading capacity from the current 24,000 b/d at a cost of $65 million. The proposed amount of increase isn't disclosed. The existing SPM receives crude for delivery to IOC refineries at Koyali, Gujarat, and Mathura, Uttar Pradesh. IOC also plans to lay a 120,000 b/d refined products pipeline from Kandla to Bhatinda.

COURTS

DELAWARE SUPREME COURT ruled 20,000 former Shell Oil Go. stockholders are entitled to a total of about $37 million because Shell allegedly failed to disclose more than $1 billion worth of oil and gas reserves when it was merged into Royal Dutch/Shell Group in 1985. The award gives the stockholders an added $2/share for their more than 14 million shares involved in the merger.

DRILLING-PRODUCTION

BARRACUDA PTY. LTD. 3 S.E. Gobe appraisal well on the 1.5 million acre PPL 56 in the southern highlands of Papua New Guinea flowed at a stabilized rate of 3,560 b/d of 45 gravity oil through a 1-3/10 in. choke from Jurassic lagifu at 7,100-7,320 ft. It is the second appraisal well on the license (OGJ, Nov. 25, 1991, p. 34). Barracuda holds a 20% interest in the license. Its partners are Southern Highlands Petroleum Co. Ltd. 50.5%, Luderick Pty Ltd. 20%, Nomeco PNG Oil Co. 7%, and Mountains West Exploration Inc. 2.5%.

RUSSIAN SIBERIAN PRODUCTION ASSOCIATION let contract to Stewart & Stevenson Services Inc., Houston, to deliver a frac spread including five 2,250 hp pumping units, a blender, computer van, and manifold truck for use in an undisclosed oil field in Russia. China's Jilin oil field organization bought a similar spread from Stewart & Stevenson that includes six 1,550 hp pumping units, two blenders, two computer vans, and a manifold truck. The orders, totaling about $12 million, are to be delivered in third quarter.

PARKER & PARSLEY PETROLEUM CO., Midland, Tex., plans to spend about $48.6 million for development drilling and enhanced recovery programs on its leases, increase its ownership in selected units of Spraberry Trend in West Texas, position itself to take advantage of a favorable acquisition market, and for general corporate purposes. The funds were generated by a 4.5 million common share stock offering.

PENWELL ENERGY, Midland, Tex., claims a record for the deepest short radius horizontal well with 2 Edwards in Ector County, Tex. Eastman Christensen used its short radius articulated motor drilling system to kick off the well at 12,278 ft measured depth, 12,270 ft true vertical depth. The end of curve survey showed 94.3 inclination at 12,348 ft MD, and the well reached 103.8 before it leveled out in the pay zone. The final vertical section was 530 ft on 140 azimuth, with 390 ft of lateral in Ordovician Ellenburger. The well reached total depth at 12,767 ft MD (12,281 ft TVD).

WESTERN MINING CORP. acquired a 40% interest in two spreads off New Zealand from TCPL Resources Ltd., Calgary, for $23 million (Australian). The tracts, PML-38146 and PML-38147, in 35 m of water in the Taranaki basin 30 km off the western coast of North Island, contain Kupe gas field and South Kupe gas/condensate field. Five wells have been drilled in South Kupe, which remains undeveloped. Western Mining will become operator with other interests held by Norcen 20%, New Zealand Oil & Gas 16.5%, New Zealand Ministry of Energy 11%, Shoseki Oil Development 10%, and Delta Petroleum 2.5%

ARAN ENERGY EXPLORATION LTD., London, agreed to buy Chevron U.K. Ltd.'s 33.33% interest in U.K. North Sea Block 211/24a, which includes a 14.38% stake in Dunlin oil field and an associated share of the Brent pipeline system. Aran will pay $19-26 million for the oil field interest and acquire interest in the rest of the block by exchanging its 0.75% interest in Block 21/14b, raising Chevron's stake in that block to 36.525%. Dunlin is expected to produce about 22,500 b/d in the second half.

ABEL ENGINEERING/WELL CONTROL CO., Houston, formed a joint venture with KV Petroleum Co. of Hungary to offer turbojet firefighting technology worldwide. KV's twin turbo firefighting machine uses two R11F-300 MiG-21 turbojet engines to deliver more than 3,000 gal/min of exhaust fumes mixed with water, chemical, or foam at a velocity of as much as 1,640 ft/sec. Using turbojet technology, the former U.S.S.R. since 1970 has extinguished more than 200 well fires in former Warsaw Pact countries.

REFINING

MOBIL OIL SINGAPORE plans to install a 25,000 b/d catalytic hydrodesulfurizer (CHD) at its 235,000 b/d Singapore refinery at a cost of $90 million. The unit, to enable production of premium low sulfur diesel fuel, is to be complete in first quarter 1994. Mobil will add a 25,000 b/d amine unit for scrubbing gas from the CHD and a 120 ton/day sulfur recovery unit. Mobil is building an aromatics complex at the refinery (OGJ, Apr. 29, 1991, p. 44). Completion of both projects will boost Mobil's refining/marketing investment in Singapore to more than $1.4 billion.

SUN CO. INC. let contract to Brown & Root Braun for engineering, procurement, and construction of the Middle Creek abatement project at its Marcus Hook, Pa., refinery. The contract includes developmental engineering on a process/stormwater conveyance system and revamp of wastewater treatment units. Brown & Root affiliate Halliburton NUS Corp. will provide environmental consulting for the project. Engineering is under way, and construction is to begin in third or fourth quarter 1992 with completion in first quarter 1994.

KOCH REFINING CO., Wichita, let contract to Jacobs Engineering Group Inc., Pasadena, Calif., for construction services on a 25,000 b/d distillate hydrotreater, a 120,000 b/d crude vacuum unit, and associated utilities and offsites at its Corpus Christi, Tex., refinery (OGJ, Mar. 2, p. 56). The new units will provide low sulfur feed, allowing Koch to produce motor vehicle fuels to new Clean Air Act specifications. Permitting is under way with project ground breaking expected in mid-1993.

ASHLAND PETROLEUM CO. and Chevron U.S.A. Inc. let contracts to Westates Carbon Inc., Los Angeles, to supply benzene recovery units for Ashland's Catlettsburg, Ky., refinery and Chevron's Hawaii refinery. The nitrogen closed loop system, based on Texaco Inc. technology and licensed to Westates, is designed to remove and recover benzene and other volatile organic compounds from wastewater streams and recycle them to process.

COGENERATION

PANHANDLE EASTERN PIPE LINE CO. (PEPL) signed a 201/2 year agreement with Sithe/Energy Group to provide firm transportation for at least 36 MMcfd of gas for Sithe's proposed 1 million kw Oswego cogeneration plant at Scriba, N.Y. PEPL will transport the gas to Union Gas Ltd. at Ojibway, Ont. Sithe has the option to increase transportation to 65 MMcfd.

ENRON POWER SERVICES INC. signed a 16 year contract with a unit of Energy Initiatives Inc. to supply 19 MMcfd of gas for an 80,000 kw cogeneration plant at Geddes, N.Y. The contract represents 100% of the plant's gas requirements. During the contract's first 3 years gas will be sold at fixed prices and thereafter at market responsive prices. Enron estimates contract revenues will be more than $200 million.

COGEN TECHNOLOGIES, Houston, increased by $145.9 million the value of its offer to sell electrical power from its proposed South Baltimore cogeneration plant to Baltimore Gas & Electric Co. Cogen agreed to reduce the per unit cost to BG&E of electricity from the 517,000 kw plant and allow BG&E to control output. A Maryland Public Service Commission examiner on Jan. 22, 1992, ruled BG&E would have to buy power from the plant if Cogen increased the value of its offer to BG&E by $100-137 million. A final ruling is expected by the end of June.

COMPANIES

UNOCAL CORP. and Texaco Inc. agreed to pay $19.5 million and $18.35 million, respectively, to California, Washington, Arizona, and Oregon to settle gasoline price fixing cases dating to the early 1970s. ARCO and Exxon Corp. earlier settled for $25 million and $9.9 million, respectively (OGJ, Apr. 27, p. 31). Chevron Corp., Mobil Corp., and Shell Oil Co. remain defendants.

BRITISH PETROLEUM PLC will cut its London and Harlowe corporate center staff by more than half to 650. The cuts will include about 250 layoffs and about 100 transfers. The rest may be moved to other companies. BP employs about 115,000 persons worldwide.

ASHLAND OIL INC. is negotiating to buy the lubricants and accessories divisions of Petro-Canada. Talks are in early stages. The divisions have revenues of about $360 million/year and profits of about $20 million/year. Petro-Canada is reorganizing and cutting its refining/marketing operations.

EXPLORATION

SAGASCO RESOURCES, Adelaide, plans on behalf of two groups to drill two wildcats in the Bass basin off Tasmania during June-July at a combined cost of about $20 million (Australian). It will be the first exploration in the region in 6 years. The 1 Flinders will be 60 km north of the Australian state's northern coast about 15 km west of the Pelican gas discovery. The 1 King will be about 25 km northwest of the Yolla gas discovery. Operator Sagasco holds a 45% interest in the 1 Flinders, with other interests held by Ampolex 25%, Bridge Oil 20%, and Gas & Fuel Exploration 10%, and 55% in 1 King, with other interests held by Gas & Fuel 20%, Cultus Petroleum 15%, and Petroz 10%.

OCCIDENTAL PETROLEUM (MALAYSIA) LTD. 1 Jintin on the 4.2 million acre Block SK-8 about 175 miles off Bintulu flowed at a rate of 32.9 MMcfd of gas and 832 b/d of 47.20 gravity condensate through a 1 in. choke from carbonate reef at 5,256-5,410 ft in about 427 ft of water. Oxy holds a 37.5% interest in the block with Nippon Oil 37.5% and Petronas Carigali 25%.

BHP PETROLEUM PLY LTD. acquired farmouts on the NT/P43 and NT/CP2 permits in the southern part of the Northern Territory sector of the Bonaparte Gulf off Australia. It will drill 1 Billawock as early as mid-1992 but before March 1993 to earn a 50% interest in the permits and has an option for a second well to jump its interest to 75%. The wildcat, about 8 km offshore and about 150 km southwest of Darwin, is expected to cost $4 million (Australian). Other interest owners are Metana Petroleum, CNW, Cultus Petroleum, Coachwood Resources, Stirling Resources, and Aquatic Resources.

INDONESIA'S state oil company Pertamina N-1 Rengasdengkok wildcat flowed 4.33 MMcfd of gas through 112 in. choke in West Java.

Copyright 1992 Oil & Gas Journal. All Rights Reserved.