INDUSTRY BRIEFS

LPG

Romanias

state owned S.C. Peco formed a liquefied petroleum gas venture with Royal Dutch/Shell unit Butagaz International BV to be incorporated as Shell Gas Romania (SGR). The new company is intended to become a major marketer of LPG in Romania, distributing at first from three existing filling plants at Constanta, Ploicsti, and Timisoara. Butagaz will contribute $12 million cash to bring Shell Gas Romanias initial capital to $22 million. SGR is to invest more than $30 million in 3 years, beginning early in 1996, to upgrade the filling plants and improve services.

Refining

Uzbekistans state owned Uzbekneftegas let contract to Ralph M. Parsons Co. Ltd., London, for project management services for its proposed 50,000 b/d condensate refinery at Bukhara. The contract includes engineering, process, procurement, construction, contractual, and project control services to second quarter 1997.

U.S. Commerce Departments Foreign Trade Zones Board received an application from Star Enterprise to grant foreign trade zone (FTZ) status to its Delaware City, Del., refinery. The board also expanded the FTZ designation for Shell Oil Co.s refinery near Houston.

American Petroleum Institute started a program to accredit oil company and independent laboratories that test refined products. The programs first phase will focus on tests required by the U.S. Environmental Protection Agency for reformulated gasoline. Other tests covering conventional gasolines, diesel, aviation fuels, and lubricants will be added.

Lubricants

Mobil (Taicang) Petroleum Co. let a 3 billion yen contract to Japans JGC Corp. to engineer and build a 73,500 metric ton/year lube oil plant in Chinas Jiangsu province, 50 km northwest of Shanghai. It is scheduled for completion by September 1997.

Shell China Holdings BV signed a conditional agreement to acquire from Hong Kongs Best Lubricant Blending Ltd. a 40% interest in Zhanjiang Best Lubricant Blending Ltd. (ZBLB). ZBLB is a Chinese venture of Best Lubricant and Zhanjiang Port Authority set up in March 1993 to produce and sell lubricants in China. The venture completed a 20,000 metric ton/year lubricants production plant at the port last April. Shell said the deal provides a good manufacturing base for its lubricants business in South China.

Sulfur

BOC Gases, Guildford, U.K., signed an agreement to install a Claus sulfur recovery burner development unit at Courtalds Chemicals Manchester, U.K., plant. BOC said sulfur recovery from hydrocarbons is made more efficient by replacing combustion air with oxygen. It plans to develop the next generation of oxygen based Claus processes and burners at the unit. The unit will cost $1.5 million and take part of the feed from the plants existing Claus unit.

Companies

U.K. government sold its remaining 1.8% stake in British Petroleum Co. plc, raising more than 500 million. The move was part of a Treasury clearout of private investments to help reduce borrowing.

Occidental Petroleum Corp. and the U.K.s Gulf Resources Corp. completed acquisition of interests in St. Louis independent refiner/marketer Clark USA Inc. under a $246.9 million deal (OGJ, Nov. 13, p. 44).

Perenco, Paris, acquired NV Turkse Shell from Shell Petroleum NV. Shell disclosed the sale plan in June, saying Turkse Shell no longer fitted its global E&P strategy. The unit operates from Diyarbakir in Southeast Turkey, producing about 13,400 b/d of oil from 27 fields. Shell retains downstream operations in Turkey, including a 630 station retail network, manufacture of lubricants, greases and industrial chemicals, and a share in the ATAS refinery at Mersin.

Exploration

Elf Petroland BV found gas on Block L4a off Netherlands. The L4-7 wildcat flowed 23 MMcfd of gas through a 4064 in. choke. Further evaluation is planned.

U.S. Minerals Management Service established an advisory group to review environmental data for offshore areas where congressional funding bans have blocked leasing. The group will provide independent review and evaluation of specific environmental information needs and report back to the MMS director within a year.

Spills

ARCO Transportation Co. (ATC) let contract to Clean Pacific Alliance (CPA) to provide equipment and resources expanding oil spill response coverage for Washington, Oregon, and California. CPA, a venture of National Response Corp. and Crowley Marine Services Inc., will preposition dedicated response vessels and equipment to increase capabilities in these states to handle offshore spills. In addition, ATC named CPA primary responder in its spill response plans, replacing Marine Spill Response Corp. by the end of first quarter 1996.

Gas storage

Sponsors of the Avoca natural gas storage project signed a long term agreement, the projects eighth, with Pennsylvania Gas & Water for firm storage service starting in 1997. In addition, Avoca chose Union Bank to complete financing of the $155 million storage site under preliminary construction at Avoca, N.Y. It will place into service about 5 bcf of storage capacity in service in three phases during 1997-99. The first, for 1.4 bcf, is slated for start-up in October 1997.

Drilling-production

Texaco Inc. agreed to operate three gas fields in the Guajira area off Northeast Colombia until 2016 under a contract signed with state owned Empresa Colombiana de Petroleos. A current operating contract expires in 2004. Texaco will install a second platform, Chuchupa B, drill as many as six horizontal wells, and lay a 12 mile pipeline from shore to Chuchupa B. The project will double current productive capacity of 300 MMcfd. Drilling will begin in third quarter 1996. Pipeline and platform installation and first production are slated for fourth quarter 1996.

Shell U.K. Exploration & Production said a supplementary study of the contents of the idled Brent spar loading buoy shows there are no harmful levels of polychlorinated biphenyl (PCB) compounds remaining in lighting control equipment on board. Survey authority Det Norske Veritas earlier had assumed as much as 8 kg of PCBs might remain on board (OGJ, Oct. 30, p. 17), but now contends only 19 ml remain in two transformers.

Ranger Oil Ltd., Calgary, and Conoco (U.K.) Ltd. agreed to develop Banff oil field in the North Sea, about 125 miles east of Aberdeen. Two adjacent blocks controlled by Ranger and Conoco will be merged for development. Two early development wells are planned for late 1996 to produce 5.5 million bbl of crude. Banff reserves are estimated at 20-110 million bbl but cannot be fully assessed until the development wells are completed. Ranger also wants to develop nearby Pierce field in which it holds a 20% interest.

Vintage Petroleum Inc., Tulsa, closed its purchase of producing properties in Argentina from Astra Cia. Argentina de Petroleo SA for $17.85 million. A related $39 million deal with Shell Cia. Argentina de Petroleo SA is to close by yearend (OGJ, Nov. 27, p. 36).

JKX Oil & Gas plc, Guildford, U.K., acquired from Makoil Inc. of Nevada its share in the Georgian joint venture company Georgian-Makoil, which holds an exploration and development license in Georgias Ninotsminda field. The venture plans to redevelop the field, with incremental production to begin next year.

MCN Corp., Detroit, agreed to acquire gas producing and pipeline assets in Virginia from units of Consol Coal Group. Included are 130 producing wells and added development rights on about 100,000 acres of coalbed methane acreage, 80 miles of gathering line, and a 50% interest in a 40 mile pipeline linked to a major interstate pipeline. MCN also agreed to buy from other parties properties in five states. Total cost of the acquisitions is $120 million for a combined 250 bcf of proved gas reserves, 250 bcf of probable and potential reserves, and 1.9 million bbl of proved oil reserves.

Norways Saga Petroleum AS and Mobil Development Norway AS exchanged interests in five offshore production licenses in the North Sea. Saga will transfer half of its 20% stake in Block 30/12 and 10% interest in Block 33/12 to Mobil. In return, Mobil will transfer to Saga 12% out of a 45% holding in Block 6406/3, 20% of Block 6406/11, and 10% of Block 35/12.

U.S. Bureau of Land Management proposed a rule to clarify its responsibility for managing oil and gas operations on land administered by the Forest Service. BLM said its responsibility on Forest Service land is limited to approval of applications to drill wells and develop fields and not applications for surface use.

Maynard Oil Co., Dallas, agreed to buy interests of Energy Development Corp., Houston, in about 250 producing wells in Garza County, Tex., adding 775 b/d to Maynards net production.

Mobil Equatorial Guinea Inc. let contract to a unit of Oceaneering International Inc., Houston, to provide a floating production, storage, and offloading (FPSO) system for use in 600 ft of water in Zafiro oil field off Equatorial Guinea. Oceaneering will buy and convert a 268,000 dwt tanker into an FPSO at a cost of $70 million. Plans call for installing two 40,000 b/d trains to handle flow from eight subsea wells.

Swift Energy Co., Houston, and Union Pacific Resources Corp. (UPRC), Fort Worth, agreed 50-50 to develop a 19,500 acre Austin chalk area in Fayette County, Tex., that offsets the Swift/LCRA block and UPRCs Rocky Creek block. Plans call for a 2D seismic survey followed by drilling of four to six wells in 1996 and a total 20-25 wells the next few years.

Oilsands

An investment trust set up by Torch Energy Advisors Inc., Houston, and Gulf Canada Resources Ltd., Calgary, completed purchase of the Alberta governments 11.74% interest in Syncrude Canada Ltd. for $353.2 million (Canadian) (OGJ, Nov. 1, p. 42). The trust also is borrowing $145 million to help finance the purchase and expand the Syncrude oilsands operation near Fort McMurray, Alta.

Pipelines

Canadas National Energy Board approved a $489 million (Canadian) project by TransCanada PipeLines Ltd., Calgary, to increase capacity on its gas pipeline by 128 MMcfd. About 50 MMcfd of the new capacity will be dedicated to exports. The project includes 184 miles of pipeline, three compressor stations and two metering stations in Saskatchewan, Manitoba, and Ontario. Work would be completed in 1996.

NGC Corp.s Trident division bought the 180 mile OKeene gas gathering system in Central Oklahoma from Oneok Inc. unit ONG Gas Gathering Co. It extends through Major, Blaine, Kingfisher, and Canadian counties and gathers about 18.5 MMcfd. NGC will reduce field gathering pressures by installing central compression and consolidating this system into its Ringwood and Rodman low pressure gathering systems. Pressure reduction will reduce wellhead operating expenses and could increase well production, NGC said.

Malaysias state owned Petronas started work on its Sabah gas receiving project. It calls for laying a 65 km gas pipeline from offshore West Erb field to Kota Kinabalu, upgrading West Erb facilities, and building an onshore gas terminal and related facilities. Start-up is slated for late 1997.

Repsol Investigaciones Petroliferas SA, Madrid, hired Allseas Marine Contractors SA, Switzerland, for design, procurement, construction, and installation of 10 in. pipelines and manifolds for the Poseidon North and South gas fields development project in the Gulf of Cadiz, 40 km off Southwest Spain. The pipelines, in 132 m maximum water depth, will move gas to an onshore processing plant. Work includes fabrication and installation of three subsea manifolds, laying three offshore sections of the 10 in. line totaling 63 km, and tying in the pipelines and umbilicals to manifolds and wellheads. Allseas Lorelay and Trenchsetter vessels will perform the work early in 1997.

Petrochemicals

Iran started up the second phase of its Arak petrochemical complex expansion. This phase boosts Irans basic petrochemicals productive capacity by 200,000 metric tons/year. Arak output during April-November totaled 596,000 tons, up 51% from the same period last year.

Marketing

Chevron Corp. will restructure its U.S. gasoline marketing business by combining regional offices, consolidating support functions, and refocusing the unit on service and sales growth. It will create a new retail marketing unit by summer 1996 and cut the nonservice station work force by 5%, or 130 jobs. Chevrons Houston and Atlanta offices will combine to form a new sales center in Atlanta, and its San Ramon, Calif., and La Habra, Calif., offices will combine to form a new sales center in La Habra.