INDUSTRY BRIEFS

Environment

France's Ministry of Industry will eliminate the sale of leaded fuel in the country beginning January 2000. In its place, a superunleaded grade of gasoline will be sold for use in the estimated 3 million vehicles affected by the ban, as well as for boats, lawn mowers, and mopeds. The decision is in concert with European Union plans to reduce pollution (see story, p. 26).

Exploration

Total made a natural gas discovery on Block XX West in Bolivia's Gran Chaco province. The ITAU X-1 (A) wildcat was drilled to 5,443 m TMD and cut a 250 m Devonian pay zone known as Huamampampa. On test, the well flowed 30.5 MMcfd of gas and 830 b/d of condensate through a 48/64-in. choke. The well has the potential to produce 70.6 MMcfd of gas and 2,000 b/d of condensate, said Total, which is looking to develop gas finds on adjacent San Alberto block to supply the new Bolivia-Brazil gas pipeline. Block interests are operator Total 41%, Mobil Boliviana de Petroleos 34%, and Tesoro Bolivia Petroleum Co. 25%.

Unocal Corp.
made its first discovery in the Rapak production-sharing contact area off East Kalimantan, Indonesia (OGJ, Feb. 1, 1999, p. 31). Unocal said Janaka North No. 1 well cut 50 ft of "high-quality reservoir with porosities greater than 35% and low water saturations" and 77 ft of associated thin-bedded reservoir at 7,797-8,600 ft TVD subsea. Drilled to 9,625 ft TVD in 4,319 ft of water, the well is the deepest drilled to date in Indonesia, said Unocal.

Statoil AS
made a discovery on Block 6507/3 off central Norway in 390 m of water. The 6507/3-3 well, drilled into the Sara prospect just north of the 1998 Skarv discovery, cut gas pay. License partner Enterprise Oil Norge Ltd. said Statoil did not test the well but reported gas production from Jurassic sandstones at 3,800 m TMD. Two sidetracks, 3A and 3B, were drilled but were dry, though Enterprise said there is still the possibility of an oil leg down-flank. Statoil plans to drill an appraisal well in Skarv in July. License partners are operator Statoil 50%, Enterprise 40%, and Saga Petroleum AS 10%.

Drilling-production

Texaco Exploration & Production Inc. and Chevron U.S.A. Production Co. began production from the Gemini deepwater subsea development in the Gulf of Mexico (OGJ, Mar. 23, 1998, p. 30). Gemini's first well is flowing 77 MMcfd of natural gas and 1,500 b/d of condensate. Gemini's wells, manifold, and flow lines are in 3,400 ft of water, 90 miles southeast of New Orleans on Mississippi Canyon Blocks 292 and 247. Two more wells, to be completed by yearend, will increase output to 150-200 MMcfd of gas and 2,000-3,000 b/d of condensate, say the partners. Operator Texaco owns 60% of Gemini and Chevron 40%.

Digital Gas Inc.,
Dallas, signed a partnership with Taichang Co. to boost production at China's two largest oil fields, Shengli and Daqing, and at two other major fields, Liaohe and Talimu. Digital Gas plans to conduct initial studies of the reservoirs and create a feasibility report. Digital will then choose target drillsites and address the problem of pressure-depleted wells that are underproducing or shut in. A 20-year technology service contract will follow the successful completion of these tests; the contract will entitle Digital Gas to a variable percentage of each field's incremental production.

U.S. Department of Energy
plans an $800,000 grant for a project that will provide gas well operators with instantaneous readings on the progress of well fracturing operations. Contributing $380,000 to the 21/2-year research project are: RealTimeZone Inc., Roswell, N.M.; New Mexico Institute of Mining and Technology; Sandia National Laboratories; and several oil companies.

Petrochemicals

Montell Polyolefins Co. NV, Showa Denko KK (SDK), Nippon Petrochemicals Co. Ltd. (NPC), and Taiwan Polypropylene Co. Ltd. (TPP) formed a Japanese polypropylene resins joint venture. The JV, called Montell SDK Sunrise Ltd., will combine the firms' production and marketing assets in Japan, where it will have an estimated market share of 10%. It grew out of an alliance formed by Montell, SDK, and NPC in October 1998. TPP joined the group last March, bringing with it an extensive understanding of Asian polypropylene markets and strong links to the mainland China market.

Yanshan Petrochemical Co.
intends to further upgrade its ethylene production facilities near Beijing. In 1994, Yanshan expanded its ethylene output to 450,000 metric tons/year from 300,000 tons. This new expansion project, which will increase production to 660,000 tons/year, will include revamps of the ethylene, butadiene, and benzene units and construction of new high-pressure polyethylene and poly- propylene units.

Catalysts

Imperial Chemical Industries plc's specialist catalysts business, Synetix, will acquire Dycat, a catalyst company owned by J & J Dyson. As part of the deal, ICI will acquire Dycat's catalyst plant at Hunwick, Durham, U.K., which Dycat will continue to operate under a long-term contract. Also outlined in the deal, Dyson will acquire Saffil, ICI's ceramic fiber business. The transaction total, said ICI, "represents less than 1% of ICI Group gross assets."

UOP LLC,
Des Plaines, Ill., acquired the aluminas business of LaRoche Industries Inc., Atlanta, for an undisclosed sum. The transaction includes LaRoche's manufacturing plant at Baton Rouge; the full alumina product line, including LaRoche's proprietary Versal aluminas; and LaRoche's 50% interest in the Crilar joint venture with Criterion Catalysts Co. LP. Key business and marketing personnel at LaRoche will be offered jobs at UOP.

Oilsands

Alberta Energy and Utilities Board (AEUB) will begin hearings July 27 on Syncrude Canada Ltd.'s planned $3 billion (Canadian) upgrader expansion at its northern Alberta oilsands plant near Fort McMurray. The proposed expansion would increase production to 480,000 b/d by 2007 from 210,000 b/d. Syncrude estimates the project would reduce production costs to $10/bbl from $13.57/bbl. AEUB will accept comments on the proposal until June 18.

Alternate fuels

U.S. Senate Appropriations Committee approved a $500,000 request for the University of Louisville to research systems for production of New York-based Pure Energy Corp.'s P-Series alternative fuel. Last month, the Department of Energy approved the new fuel, which is made primarily from renewable resources and is nearly sulfur-free, according to Pure Energy. The funding will be used to design an economically viable refinery to produce commercial amounts of the fuel. Pure Energy hopes to build the first production unit in 2000.

Companies

Honeywell Inc., Minneapolis, and AlliedSignal Inc., Morristown, N.J., signed a definitive all-stock merger agreement valued at $14 billion. Each Honeywell share will be swapped for 1.875 shares of AlliedSignal. The new firm, to retain the Honeywell name, will be based in Morristown and owned 70% by AlliedSignal and 30% by Honeywell. Among AlliedSignal's products are specialty chemicals, performance fibers, and plastics, while Honeywell is, among other things, a leading supplier of process control technology to the refining and petrochemical industries.

Friede Goldman International Inc.,
Jackson, Miss., and Halter Marine Group Inc., Gulfport, Miss., signed a definitive merger agreement. Under the deal's terms, each Halter share will be exchanged for 0.4614 share of Friede Goldman. The new company, to be called Friede Goldman Halter Inc., will have a reported combined asset valued of more than $900 million and will be based in Gulfport.

Kerr-McGee Corp.,
Oklahoma City, agreed to settle three class-action lawsuits related to the decision to roll up recently acquired Sun Energy Partners LP (OGJ, Mar. 22, 1999, p. 46). Based on the settlement, Kerr-McGee will increase the roll-up offer for each of Sun Energy's 7,543,100 publicly held limited partnership units to $5.75 from $4.52. After its merger with Oryx Energy Co. is finalized, Kerr-McGee will pay the initial $4.52/share; the additional $1.23/share will be paid upon court approval of the settlement.

Unocal Corp.
and Mitsui Oil Exploration Co. Ltd. unit Moeco Thailand Co. acquired interests in Blocks 14A, 15A, and 16A, 250 km off Songkhla, Thailand. The three blocks cover an area of 3,900 sq m and are in 60.8 m of water. Unocal and Moeco acquired interests of 16% and 4%, respectively, in the blocks from Thailand's PTT Exploration & Production plc, which already auctioned off a 20% interest last year. The firms will begin drilling on the blocks as early as yearend.

PP&L Resources Inc.,
Allentown, Pa., will acquire Montana Power Co.'s energy marketing operations, which will become a part of PP&L's marketing company, PP&L EnergyPlus. The division will sell electricity in both the wholesale and retail markets in the U.S. Northwest and Montana. The acquired operations will remain in Butte, Mont. PP&L is in the process of purchasing 13 Montana power plants with 2,600 MW total capacity.

Burlington Resources Offshore Inc.
Houston, acquired Houston-based Mariner Energy Inc.'s 63% working interest in the Pluto deepwater development project in the Gulf of Mexico. Mariner is operator and holds the remaining working interest. After payout, Burlington's ownership will be reduced to 49%. The acquired properties are on Mississippi Canyon Blocks 673, 674, 717, and 718 in 2,800 ft of water. Start-up of the project is expected in fourth quarter 1999.

Gentry Resources Ltd.,
Calgary, launched a share-swap takeover bid for Barra Resources Inc., also of Calgary. Under terms of the deal, Barra shareholders would receive 0.381 share of Gentry for each share held. The offer is conditional on Gentry acquiring at least 90% of Barra shares. Gentry said the offer has the conditional support of the boards of both companies.

Vintage Petroleum Inc.,
Tulsa, acquired Total's 70% interest in Argentina's El Huemul field for $93 million. The field lies in Santa Cruz province and produces about 10,000 b/d of oil and 800,000 cu m/day of natural gas. Total said the sale is in line with its plan to rationalize its assets in Argentina and focus on the country's Neuquén and Austral basins, where it sees the strongest growth potential.

Associations

Canadian Association of Petroleum Producers (CAPP) introduced a voluntary environment, health, and safety program that asks members to provide new data. CAPP said the data will be released in aggregate to the public to verify the industry is meeting regulatory obligations; individual company data will not be released. The program will include data on sulfur, flare gas, and benzene emissions; well abandonments; and safety performance. CAPP represents about 170 companies producing 95% of Canada's petroleum output.

Pipelines

Duke Energy International let a $100 million construction service contract to a consortium of companies for a 494-mile, 18-in. natural gas pipeline in Australia, extending from Longford, Victoria, to Sydney in New South Wales. The consortium is comprised of Willbros Group Inc., Tulsa, and Australian companies Transfield Pty. Ltd. and Macmahon Contractors Pty. Ltd. Construction of the line is slated to begin in third quarter 1999, with completion expected a year later.

Kinder Morgan Energy Partners LP,
Houston, completed the $25 million expansion of its southern California products pipeline. The new 13-mile, 16-in. section transports gasoline, jet fuel, and diesel from the company's Carson, Calif., transfer station to Norwalk, Calif. It will eliminate bottlenecks on the system, said Kinder Morgan, and will increase capacity to 520,000 b/d from 340,000 b/d. The pipeline is part of a larger system that serves markets in southern California, Nevada, and Arizona.

U.S. Department of Transportation's
Research and Special Programs Administration plans to approve Chevron Pipe Line Co.'s request to cover an exposed pipeline on the Gulf of Mexico seabed with concrete mesh blanket units. Federal rules require exposed lines to be reburied. Chevron said Hurricane Georges uncovered 2,700 ft of its Chandeleur Block 15 pipeline, but burial would force its Pascagoula, Miss., refinery to shut in and cause environmental damage.

Power

Coastal Power Co., Houston, plans to build a 265-MW gas-fired power plant near Brush, Colo., northeast of Denver. Coastal unit Fulton Cogeneration Associates LP (FCA) will own and operate the plant. FCA has also entered into a power purchase agreement with Public Service Co. of Colorado that will begin in May 2000. Work on the plant is slated to begin this summer. Coastal unit Colorado Interstate Gas Co. will build a pipeline segment that will link the plant to its Young and Fort Morgan natural gas storage fields.

National Power plc,
London, let a $200 million contract to Asea Brown Boveri Ltd., London, to build Australia's largest gas-fired combined cycle power plant. The 500-MW plant will be built at Pelican Point, near Adelaide, with the first 160 MW of capacity due on line by November 2000. Full capacity operation is anticipated by April 2001. The plant will incorporate two GT13E2 turbines, fitted with low-emission burner technology.

Calpine Corp.,
San Jose, began construction of its $275 million, 540-MW natural gas-fired power plant on the Fort Mojave Indian Reservation in Mojave County, Ariz. Work on South Point power plant, which reportedly will be the first merchant plant built on an Indian reservation, will begin in early 2001. The plant will deliver power to Arizona, Nevada, and California.