INDUSTRY BRIEFS

April 24, 1995
A RUSSIAN PIPELINE spilled about 73 bbl of diesel fuel into a village pond in the southern Urals, threatening contamination of a nearby river. The leak occurred on the Ufa-Petropavlovsk pipeline, which transports refined products from refineries at Ufa, Bashkortostan. Containment booms were deployed to prevent the spill from spreading into the Ufa River. Russian environmental officials estimate the country's pipelines spill 22 million bbl/year of oil in about 700 major leaks/year.

SPILLS

A RUSSIAN PIPELINE spilled about 73 bbl of diesel fuel into a village pond in the southern Urals, threatening contamination of a nearby river. The leak occurred on the Ufa-Petropavlovsk pipeline, which transports refined products from refineries at Ufa, Bashkortostan. Containment booms were deployed to prevent the spill from spreading into the Ufa River. Russian environmental officials estimate the country's pipelines spill 22 million bbl/year of oil in about 700 major leaks/year.

TRADING

LONDON'S International Petroleum Exchange crude oil trading activities Apr. 12 peaked at 121,495 contracts, equivalent to more than 100 million bbl of oil.

GAS PROCESSING

WESTCOAST ENERGY INC., Vancouver, B.C., shelved plans for the $672 million (Canadian) Tumbler Ridge gas processing plant in Northeast British Columbia because weak gas prices have cut Monkman Valley gas producers' expected demand for gas processing services to 230 MMcfd from 313 MMcfd. Instead, Westcoast will meet Monkman producer needs with a 230 MMcfd, $400 million expansion of the Pine River gas processing plant near Chetwynd, B.C. A $300 million doubling of Pine River capacity was finished last November.

PETROCHEMICALS

KUWAIT formed a public shareholding company, Boubyan Petrochemicals Co., to act as a third partner in a venture with Union Carbide Corp. and Kuwait's Petrochemicals Industries Co. that will build and operate a $1.9 billion petrochemical complex in Kuwait. The complex will produce 650,000 metric tons/year of ethylene, 450,000 tons/year of polyethylene, and 350,000 tons/year of ethylene glycol.

LYONDELL PETROCHEMICAL CO. agreed to acquire Occidental Chemical Corp.'s high density polyethylene business plus inventory for about $400 million. Assets involved are resin production plants at Victoria and Matagorda, Tex., and an associated research and development facility. Combined capacities total 1.5 billion lb/year of HDPE.

POLIMERI EUROPA SRL, a joint venture of Union Carbide Corp. and EniChem SpA, began operations. EniChem will transfer to Polimeri its polyethylene production and research and development facilities in Italy, Germany, and France, giving Polimeri a total polyethylene capacity of about 1.3 million metric tons/year. Polimeri plans to begin building in mid-1997 a 400,000 ton/year polyethylene plant, based on Union Carbide's gas phase Unipol process, in Brindisi, Italy.

SUN CO. INC. plans to expand its polymer grade propylene output with construction of a 425 million lb/year propylene splitter at its Marcus Hook, Pa., refinery. The project, to include idling some existing capacity, is to go on stream by January 1997 and hike Sun's propylene capacity to 650 million lb/year. Sun also signed a contract to supply all Marcus Hook propylene output to Epsilon Products Co.'s adjacent polypropylene plant at Marcus Hook, where the latter will expand polypropylene capacity by 360 million lb/year. In addition, Sun will supply ethylene to Epsilon for copolymer production.

PIPELINES

CANADA'S NATIONAL ENERGY BOARD set a permanent formula for pipeline tolls. A benchmark rate of return on common equity of 12.25% will apply to portions of individual pipelines' equity. Receiving deemed equity ratios in 1995 of 30% are Alberta Natural Gas Co., Foothills Pipe Lines Ltd., TransCanada PipeLines Ltd., and Trans Quebec & Maritimes Pipeline Inc., 35% Westcoast Energy Inc., and 45% Trans Mountain Pipe Lines Co. An annual adjustment will be tied to predicted federal bond yields.

FEDERAL ENERGY REGULATORY COMMISSION approved a 164 MMcfd expansion that will boost Northwest Pipeline Corp.'s main line gas transmission capacity to 2.61 bcfd. Included are a $58 million project to hike capacity by 62 MMcfd in Idaho, Oregon, Washington, and Wyoming and a $49.2 million project to provide 102 MMcfd of new firm main line capacity for Northwest Natural Gas Co.

WILLIAMS BROS.-CMPS ENGINEERS filled with natural gas and commissioned the Karratha-Port Hedland pipeline in Western Australia. The line will be shut in and left until a power plant it will fuel is commissioned in about 1-2 months. The pipeline is part of BHP Minerals Pty. Ltd.'s program to provide energy for its iron ore mine and potential downstream processing in Western Australia's Pilbara region.

SAGA PETROLEUM AS hired Allseas Marine Contractors SA to lay a 31.4 km, 16 in. oil pipeline between Snorre tension leg platform and Gullfaks A platform off Norway in 140-310 m of water. In addition, Shell U.K. Exploration & Production hired Allseas to lay a 28.5 km, 16 in. line with 3 in. piggyback between Shell Expro's Schooner and Conoco Inc.'s Murdoch platforms in the U.K. North Sea. Allseas' Lorelay will handle both projects with the company's Trenchsetter assisting in the Shell Expro job.

COMPANIES

ENSERCH EXPLORATION INC., Dallas, signed a definitive agreement to acquire the Dalen Corp. affiliate of Pacific Gas & Electric Co. for $340 million cash and assumption or refinancing of $115 million in bank debt. As of Jan. 1, Dalen, with headquarters in Dallas, held reserves totaling 307.4 bcf of gas and 11.7 million bbl of crude oil.

PANCANADIAN PETROLEUM LTD., Calgary, will spend about $870 million (Canadian) on exploration and development in 1995, split 50-50 between oil and gas targets. It plans to drill about 1,200 wells, mainly in Alberta. The company replaced 170% of its conventional production in 1994 and added 136 million bbl of oil equivalent reserves. It also boosted via acquisition gas export pipeline capacity in 1994 to 200 MMcfd from 50 MMcfd.

FOREST OIL CORP., Denver, agreed to sell $45 million of common and preferred stock to Anschutz Corp., also of Denver, and restructure about $62.1 million in debt held by Joint Energy Development Investments LP, an affiliate of Enron Capital & Trade Resources Corp. Both moves are intended to bolster Forest's capital structure and position it to expand assets.

TEXACO INC. will buy the 9.8% interest in Texaco Canada Inc. that Canadian 88 Energy Corp., Calgary, owns. Texaco will pay $1.48 (Canadian)/share for 12.4 million shares, boosting its stake in Texaco Canada to 87.8%. Texaco's offer extends to all Texaco Canada common shares it does not own. It must hold 90% to force remaining minority shareholders to sell.

APACHE CORP., Houston, and DeKalb Energy Co., Calgary, received U.S. Securities and Exchange Commission approval for their proposed merger, following U.S. antitrust and Investment Canada Act approvals (OGJ, Feb. 20, p. 100).

EXPLORATION

MOBIL CORP. affiliate Mobil Oil Tulpar Inc. agreed to participate in a venture with three Kazakh state firms covering exploration on the 4 million acre Tulpar block in Northwest Kazakhstan. Mobil will hold a 50% interest in Tulpar Munai Ltd., with state owned Poisk, Tulpar, and Aktyubinskneft together holding the remaining 50% interest,

TRINITY GAS CORP., Brownwood, Tex., signed an association contract with Colombia's state owned Empresa Colombiana de Petroleos that grants Trinity rights to explore for natural gas on a 371,000 acre block in Southwest Colombia's Upper Cauca basin. The contract grants ownership, production, and gas products marketing rights to Trinity and permits Trinity to lay a pipeline to market the gas.

ELF EXPLORATION INC. acquired a farmout on Tatham Offshore Inc.'s Phar Lap Deep prospect in the Viosca Knoll area off Louisiana, where Tatham is drilling the first wildcat on Block 81 8. Elf will earn a 35% working interest in the prospect in return for paying costs associated with deepening the wildcat to a maximum 19,500 ft and evaluating the interval drilled. After drilling and testing the well, Elf will operate and hold a 50% working interest in the prospect.

DRILLING-PRODUCTION

SONAT OFFSHORE DRILLING INC. ended merger talks with Reading & Bates Corp. after R&B again rejected an unsolicited takeover offer of $100 million in cash and stock. R&B first rejected the offer last month (OGJ, Mar. 27, p. 29).

ZAVER PETROLEUM CORP., Islamabad, acquired Occidental of Pakistan Inc. (OPI) from Occidental Petroleum Corp. OPI owns producing properties in northern Pakistan's Potwar basin, including interests in Dhurnal and Bhangali oil and gas fields and Ratana gas field. The fields produce 4,200 b/d of oil and liquefied petroleum gas and 25.2 MMcfd of natural gas. Included in the deal is a 2 year option for Zaver to participate in new exploration ventures with Occidental Petroleum (Pakistan) Inc., another Oxy affiliate that holds majority interests in seven exploration licenses.

CHAPARRAL RESOURCES INC., Denver, agreed to acquire for stock 100% of the stock of an undisclosed private firm that owns a 20% interest in Central Asian Petroleum Guernsey Ltd. (CAP-G), which holds 50% of the rights to develop Karakuduk oil field in Kazakhstan. That boosts Chaparral's stake in CAP-G to 45%. Chaparral is required to pay as much as $4 million to work over and place on production at least seven wells in the field. Full field development will entail drilling 90 wells during 6 years.

BP EXPLORATION OPERATING CO. LTD. let a $14 million contract to Transocean AS, Tananger, Norway, to charter Transocean 8 semisubmersible rig for an expected 6 months of drilling in U.K. North Sea Cyrus and Andrew fields. The rig is being mobilized to U.K.'s West of Shetland region from Norway to drill one well for Total Oil Marine plc and one for Amoco (U.K.) Exploration Co. this summer before it begins work for BP (OGJ, Apr. 17, p. 25).

SHELL U.K. EXPLORATION & PRODUCTION let a $60 million contract to McDermott Marine Construction Ltd., London, for subsea work during development of Teal, South Teal, and Guillemot fields in the U.K. North Sea. McDermott will design, procure, build, install, and commission subsea flow lines, a gas export pipeline, and risers and umbilicals. Installation will begin in spring 1996 for completion that summer. The three fields are to be developed with a new floating production storage and offloading vessel (OGJ, Mar. 6, p. 33).

NORWAY'S Den norske stats oijeselskap AS let a $23 million contract to Kvaerner AS, Oslo, for detailed engineering of process facilities on its Norne field production ship. The award follows a year of work by Kvaerner on preliminary engineering for the vessel, said to be the world's largest production ship (OGJ, May 23, 1994, p. 23).

ENTERPRISE OIL PLC, London, disclosed test results for its 2 Doina appraisal well drilled on Block XV off Romania in the Black Sea. One reservoir interval flowed a maximum rate of 17.5 MMcfd. Plans call for fully evaluating 2 Doina and two other wells drilled earlier on the block.

ESSO AUSTRALIA LTD. let a term contract to Antah Drilling Sdn. Bhd., a joint venture company of Pool Energy Services Co., Houston, for a platform rig to operate in Australia's Bass Strait. Antah's platform rig will undergo modifications that include installation of new generation top drive drilling and automated pipehandling systems. It will go to work early in 1996.

POWER GENERATION

INDEPENDENT POWER PRODUCERS (IPPs) hailed a FERC ruling they say helps bolster IPP competitive prospects. FERC refused to unilaterally abrogate contracts between New York State Electric & Gas Corp. (Nyseg) and two IPPS. FERC said the contracts do not violate U.S. law requiring utilities to buy electricity from competing power generators. Nyseg had sought to abrogate the long term contracts because its avoided cost estimates had decreased.

COASTAL CORP.'S Coastal Power Production Co. unit signed a project development agreement with Habibullah Energy Ltd., Karachi, to build and operate a 140,000 kw, combined cycle gas fired power plant at Quetta, Pakistan, at a cost of $135 million. The plant is to start up at two-thirds capacity at yearend 1996 and reach full start-up by yearend 1997.

REFINING

BRITISH PETROLEUM CO. PLC let a $20 million (Australian) contract to John Brown Engineers & Constructors Ltd., London, to convert a platformer to an isomerization unit at its 115,000 b/d Kwinana refinery in Western Australia. The project is part of a $200 million upgrade disclosed in July 1993.

SIX CALIFORNIA REFINERS sued Unocal Corp. seeking to invalidate its patent for California Phase 2 reformulated gasoline (RFG). The suit contends Unocal claims it alone is free to make and sell Phase 2 RFG required by the state and plans to charge a royalty payment for all Phase 2 RFG sold in the state. Plaintiffs ARCO, Chevron Corp., Exxon Corp., Mobil Corp., Shell Oil Co., and Texaco Inc. contend RFG cannot be patented because it is the result of many different formulations by a number of companies over the years.

M.W. KELLOGG CO. acquired Kerr-McGee Corp.'s residuum oil supercritical extraction (ROSE) refining process, which upgrades resids into feedstocks for refinery conversion units. Included is Kerr-McGee's ROSE pilot plant, to be moved to Kellogg's technology center in West Houston.

TANKERS

NKK CORP. launched a 149,200 dwt crude oil tanker it built for Global Transport Enterprises Ltd., Liberia, at its Tsu, Japan, shipyard.

Copyright 1995 Oil & Gas Journal. All Rights Reserved.