INDUSTRY BRIEFS

Lubes

Chevron Corp. unit Chevron Products Co. is purchasing Amoco Corp.'s lubricants business unit. The acquisition will create one of the largest marketers of branded finished lubricants in North America, said Chevron. The deal includes Amoco product names and formulations but no production facilities.

Gas distribution

Mexico's Comisión Reguladora de Energia (CRE) is accepting bids on the Quer?taro natural gas distribution permit. The zone encompasses Quer?taro, Corregidora, El Marqu?s, and Huimilpan, as well as San Juan del Rio, all in the state of Quer?taro. CRE will make bid packages available June 24-Aug. 24. Clarification meetings are set for July 9 and Aug. 13. Companies that submit technical bids meeting all requirements will be entitled to submit economic bids.

Gas processing

Sasol Synthetic Fuels Pty. Ltd. began a feasibility study on expanding production capacity of its Secunda, South Africa, synthetic fuels plant to 180,000 b/d of crude oil equivalent from 150,000 b/d. The study is expected to be completed early in 1999. The project, named Sky High, follows an existing program to expand Sasol's fuel and chemical production by 6%. If implemented, the second project will be completed in four phases, with the first two finished early in 2001 and the third and fourth in 2002 and 2003, respectively.

LNG

Nigeria LNG, Lagos, let contract for front-end engineering work to the TSKJ consortium of Technip, Snamprogetti SpA, M.W. Kellogg Co., and JGC Corp. The contract is for a third train at an LNG plant under construction in Rivers State, Nigeria. TSKJ is building the first two trains, which are scheduled to come on stream in October 1999. The third train and its associated facilities are similar in size and design to the first two trains. If approved, the expansion will increase LNG capacity at the site to 8.7 million metric tons/year from 5.9 million tons/year.

Petrochemicals

A combine of Dow Chemical Co. and Shell Chemicals Ltd. was selected as the leading contender for a world-scale integrated petrochemical project proposed for the Pilbara region of Western Australia. The companies expect to complete the first phase of a feasibility study by yearend, leading to a full feasibility study and final decision by late 1999. The Dow-Shell proposal, submitted in 1997, includes a jointly owned 450,000 metric ton/year ethylene plant and a Shell-owned 400,000 ton/year monoethylene glycol plant.

Chevron Chemical Co.
will invest $90 million to build a 100,000 metric ton/year polystyrene plant at Zhangjiagang in China's Jiangsu province, according to local media reports. The plant will be on stream in 2000. Chevron will own and operate the plant.

China Petrochemical Corp.
(Sinopec) awarded basic engineering work on a 40,000 metric ton/year polystyrene plant at Dalian, China, to ABB Lummus Global BV. Sinopec unit Dalian Petrochemical Corp. will construct the plant, which will use BP Chemicals Ltd.'s proprietary suspension polymerization process.

Exploration

Lasmo plc signed a joint operating body production-sharing contract with Indonesian state oil firm Pertamina for the Malagot onshore exploration license, covering 4,235 sq km of the Bird's Head area in western Irian Jaya. The license will be jointly operated and managed by Lasmo (Malagot) Ltd. 60% and Pertamina 40%. The acreage is in the same sedimentary basin as nearby Wiriagar and Vorwata discoveries (OGJ, Nov. 10, 1997, p. 46). Two exploration wells are planned in the first 3 years.

Morocco's
Office National de Recherches et d'Exploitations Petrolieres awarded a 1-year exploration contract on the Anza Haute Mer Block off Morocco to Shell Prospecting Africa BV. Shell will conduct 2D seismic on the 5,000 sq km block and spend an estimated $1 million during the term of the contract.

Companies

Pendaries Petroleum Ltd., Toronto, will pay $38 million (Canadian) to acquire Murphy Pacific Rim Ltd.'s 45% interest in Block 04/36 in Bohai Bay, China. The acquisition increases Pendaries' working interest in Block 04/36 to 55% from 10%. Kerr-McGee China Petroleum Ltd., a unit of Kerr-McGee Corp., is operator of the block and retains a 45% interest. The acquisition is subject to the approval of China National Offshore Oil Corp. (Cnooc).

U.S. Department of Justice
will not challenge Siemens AG's $1.525 billion offer for CBS Corp.'s Westinghouse Power Generation subsidiary. A binding agreement was signed between the two companies on Nov. 14, 1997, subject to regulatory reviews in the U.S. and Europe. Siemens also received approvals from the Committee on Foreign Investment in the United States and the German Cartel Office. Westinghouse Power Generation designs, manufactures, and services steam turbine-generators and combustion turbine-generators for natural gas and oil-fired power plants, and constructs turnkey power plants.

Tengasco Inc.,
Knoxville, Tenn., agreed to purchase Twister Gas Services LLC, Oklahoma City, and its affiliate Twister Partners LLC, for $12.5 million in cash and $2.5 million in Tengasco stock. Twister, with properties in Oklahoma and Texas, has interests in 270 natural gas and oil wells and 60 miles of natural gas gathering pipelines. Twister will operate as a unit of Tengasco and retain its corporate headquarters at Oklahoma City. The acquisition will boost Tengasco's total number of operating natural gas and oil wells to 490 and increase its proven natural gas reserves by 24% to 80.7 bcf.

Greece
plans to issue 23% of its share capital of Hellenic Petroleum SA to the Greek public, company employees, and institutional investors, both domestic and foreign. The shares will be listed on the Athens and London stock exchanges.

Drilling-production

Amoco Corp.'s Champlin 457 A No. 5 well in Wyoming's Whitney Canyon field began producing 60 MMcfd of gas from the Madison formation of the Western Overthrust belt. Operator Amoco said the well, drilled to 14,600 ft as part of an infill drilling program, is expected to increase the field's booked reserves by 17%. It boosted input to Whitney Canyon gas plant to 200 MMcfd. Amoco will spend more than $30 million/year on its operated Whitney Canyon plant projects and a two-rig drilling program in nearby fields in 1998 and 1999. Intrests in the well are Amoco 75% and Union Pacific Resources Co. 25%.

An agreement between ARCO
and Cnooc for development of the Ledong gas fields in the South China Sea was expanded to include structures in the nearby Wenchang area. The new agreement increases the likelihood that a commercially viable project can be developed by combining the Ledong and Wenchang prospects with nearby ARCO-operated Yacheng 13-1 gas field, said ARCO. An expanded feasibility study will be completed by the end of June. The Wenchang area has three geological structures, two of which have been drilled and found to contain gas.

Marathon Oil Co.,
Houston, has signed a 5-year contract for Schlumberger Ltd.'s new-generation Sedco Express deepwater semisubmersible. The unit will start work in the Gulf of Mexico in third quarter 2000; it is rated for water depths up to 8,500 ft. The semi has four 2,200-hp, 7,500-psi integrated drilling fluids and cement pumps and a drilling fluids system.

U.K. Department of Trade and Industry
approved Amerada Hess Ltd.'s development of its Flora discovery on North Sea Blocks 31/26a and 31/26c. License partner Premier Oil plc, London, said the pre-Cretaceous formation lies 8.5 km north of Amerada's Fife field. It will be developed as a subsea satellite of Uisge Gorm production, storage, and offloading ship, which is producing from Fife and Fergus fields. Development will require two horizontal production wells, tied back to the ship through a thermally insulated pipeline, and a vertical water injector. First oil is anticipated in October 1998; expected peak production is 20,000 b/d.

Elf Exploration U.K. plc
let contract to Kvaerner Oil & Gas Ltd., London, for maintenance, operations, engineering, construction, and general support services in Elgin and Franklin fields, currently under development. Work is due to begin immediately, continuing through field start-up in 2000 and on to 2005. Contract value is £83 million ($133 million). Elf is developing Block 22/30c Elgin and Block 29/5b Franklin in parallel with development of Block 22/30b Shearwater by Shell U.K. Exploration & Production. The two developments will share a new export pipeline (OGJ, Apr. 21, 1997, p. 29).

Petroleos de Venezuela SA
(Pdvsa) let a 16-year contract worth $800 million to John Wood Group plc, Aberdeen, to operate, maintain, and expand the largest water injection operation on Venezuela's Lake Maracaibo. Work will cover two onshore water treatment plants, 15 existing platforms, and 800 km of lake-bed pipelines to 170 injection wells. It will also require design, installation, and operation of five new water injection platforms and associated pipelines and equipment. Pipeline construction is due to begin in fourth quarter 1998. Pdvsa has an option to build and install five additional water injection platforms.

Pipelines

Canada's National Energy Board approved Interprovincial Pipe Line Inc.'s (IPL) application to lay 15 new sections of 36-in. pipe to connect to existing 48-in. loop sections, creating a fifth pipeline between Kerrobert, Sask., and Gretna, Man., for export markets. The $610 million (Canadian) project will increase IPL's system capacity by 170,000 b/d. Work will include: 385 miles of pipeline, 19 new pumping units, 15 tie-in facilities, and station equipment. About 232 miles of pipeline will be constructed on IPL easements, while 153 miles will be laid on easements to be acquired. The company expects an in-service date of Jan. 31, 1999, for the new line pipe and Sept. 1, 1999, for the pumping facilities.

Gasoducto Cruz del Sur SA,
a 50-50 venture of BG plc and Pan American Energy LLC, let a front-end engineering and design contract to Intec Engineering Inc., Houston, for the Buenos Aires-to-Monte- video pipeline project. The trunk line from Colonia, Argentina, to Montevideo is a 160-km line of 18-in. pipe, with laterals to feed several cities. The laterals comprise 200-km of 3-18 in. pipe. Pan American Energy is a joint venture of Amoco Corp. 60% and Bridas Corp. 40%.

Alberta Energy and Utilities Board
approved conversion of a 37-km sweet gas pipeline in central Alberta to sour-gas service. AEUB said that Encal Energy Ltd., Calgary, met all conditions set forth in an August 1997 agreement. Among those conditions was a requirement that Encal complete an assessment of the line, provide reasonable explanations for anomalies and corrosion, and relocate emergency shutdown valves. The line was delivering sweet gas to Gulf Canada Ltd.'s Homeglen gas plant 70 km southwest of Edmonton. Encal says 2.5 MMcfd of sour gas will begin flowing almost immediately.

Power

Turkish Electricity Generation & Transmission Corp. approved an energy sales agreement with a combine of InterGen, Boston, and Istanbul-based construction firm Enka. Last year, the combine was awarded construction contracts for the three power stations involved in the sales agreement. The combined cycle, gas-fired plants, all in Turkey, are a 1,400-MW plant at Izmit, a 1,400-MW plant at Gebze, and a 700-MW plant at Adapazari. InterGen is a 50-50 venture of Bechtel Enterprises Inc. and Shell Generating Ltd.

Financing

Hardy Oil & Gas plc, London, aims to raise £79.1 million ($127 million) by means of a two-for-seven shares issue. The money raised will help fund Hardy's expansion plans. The independent aims to increase net production fivefold over the next 5 years to more than 50,000 boed, following a string of exploration successes. This year, the company aims to spend £95 million ($152 million) on exploration and development work, with a total outlay of more than £300 million ($480 million) anticipated to the end of 2002. Hardy's net reserves amounted to 171 million boe at the end of 1997.

Futures

New York Mercantile Exchange (Nymex) will launch its Cinergy and Entergy electricity futures contracts on July 10, starting with a September contract. Options on the two futures contracts will be launched Aug. 7, with 6 months initially listed, beginning with an October contract; another 6 months will be listed for trading on August 14. The new eastern electricity contracts will be offered for after-hours trading on the Nymex Access electronic trading system Mondays through Thursdays-the same as the two western U.S. contracts. Electronic trading of the eastern contracts will begin on July 13.

Exports-imports

Russia's oil exports earned the country only $2.9 billion in first quarter 1998, a 24.5% drop from first quarter 1997 (OGJ, June 8, 1998, p. 25). Export volumes rose 8.9% to 32.1 million metric tons. The price of Russian oil in the first quarter fell to $89.10/ton vs. $128.40/ton in first quarter 1997. The value of natural gas exports dropped by 14.7% in the first quarter to $4.3 billion vs. $5.07 billion last year, while export volumes grew 1% to 60.7 billion cu m.

Refining

TransAmerican Refining Corp., Houston, will construct the first commercial catalytic distillation hydrodesulfurization (Cdhds) unit at its refinery at Norco, La. (OGJ, June 15, 1998, p. 36). Cdhds produces low-sulfur fuels. The unit will be a retrofit of an existing column, with start-up expected early in 1999. TransAmerican will use the unit to process the heavy naphtha fraction of the gasoline from its fluid catalytic cracking unit to produce a low-sulfur gasoline blendstock.