OGJ NEWSLETTER

March 12, 1990
One of the world's largest international gas transmission systems could emerge from studies undertaken by a group of European companies into increasing gas use in Southeast Asia. The companies, led by Agip SpA of Italy and Gaz de France and Total-CFP of France, are in the early stages of evaluating a 5,000 mile, $10 billion pipeline system that would link gas fields of Indonesia, Brunei, and Malaysia with Singapore, Thailand, and the Philippines. Officials from the countries involved will

One of the world's largest international gas transmission systems could emerge from studies undertaken by a group of European companies into increasing gas use in Southeast Asia.

The companies, led by Agip SpA of Italy and Gaz de France and Total-CFP of France, are in the early stages of evaluating a 5,000 mile, $10 billion pipeline system that would link gas fields of Indonesia, Brunei, and Malaysia with Singapore, Thailand, and the Philippines.

Officials from the countries involved will decide whether to advance the project to the feasibility study stage at a meeting this summer.

Canada's National Energy Board will open hearings Mar. 26 in Ottawa on requests by TransCanada PipeLines Ltd. for export related construction.

A number of natural gas export applications and the proposed Iroquois pipeline to serve markets in the U.S. Northeast are linked with TransCanada's application.

California Public Utilities Commission and Wyoming-California Pipeline Co. settled their lawsuit over WyCal's plans to build an interstate gas pipeline from Wyoming to California.

That makes WyCal the first among competing projects to comply fully with CPUC conditions issued last month (OGJ, Feb. 12, Newsletter). CPUC agreed not to block WyCal's federal permit efforts in exchange for WyCal agreeing not to bypass California utilities.

Meanwhile, Mojave Pipeline Co. said a 15 year agreement to transport gas for Meridian Oil Inc. makes financially feasible Mojave's proposed pipeline to Kern County, Calif.

Mojave's 400 MMcfd project is 78% subscribed with Meridian's 50 MMcfd pact and should be 90%, committed within 90 days.

A record 230-240 exploratory and appraisal wells could be drilled in the U.K. North Sea this year, 20% more than in 1989, according to a U.K. Department of Energy survey of operators.

If all the wells are drilled, the total would exceed the previous record in 1984 by more than 10%.

DOE said U.K. operators plan capital spending of 3.7 billion ($6.29 billion) this year, up nearly 50% from 1989.

The heat may have been taken out of the underlying unrest among contractor personnel in the U.K. North Sea that led to strikes last summer.

Employees on BP Exploration and Shell-Esso installations off the U.K. will get a new remuneration package Apr. 1, including an 11.7% wage increase, higher sickness benefits, accident and life assurance benefits, improved bereavement leave conditions, and a commitment to implement pension plans.

The U.S. Minerals Management Service needs more-unannounced inspections at offshore production platforms in the-Gulf of Mexico, a task force says.

The group said inspections are not keeping pace with growing demands. It recommended methods to reduce the time needed for mandatory inspections, freeing inspectors for surprise, spot inspections.

World crude production rose to 59.661 million b/d in 1989, up 2.8%, from 1988 production and the highest since 1980.

OPEC-accounted for the entire increase in 1989 ' and Communist production fell 1.9% to 15.2 million b/d. Non-OPEC, nonCommunist production slipped, mainly on declines in the U.S. and U.K.

Alberta plans to tighten regulations to cover concerns over rising costs of abandoned wells.

Energy Resources-Conservation board will propose a $100/year fee for inactive wells and establish a descending order of responsibility for wells, starting with a current license holder and moving to other working interests, previous owners, and private mineral rights owners.

BP America is entering the home stretch in cleanup of the Feb. 7 spill of Alaskan crude off Huntington Beach, Calif. (OGJ, Mar 5, p. 24). By the end of last week, BP expected to have all toxicology testing completed of affected beaches needed for reopening them. The cleanup crew had shrunk to 165, with rock washing expected to be complete late last week.

Voters in Torrance, Calif., last week handily defeated a measure that would have had national repercussions for refiners: restrictions on storage of hydrofluoric acid.

The vote was the culmination of 2 year legal and regulatory battle stemming from a Nov. 24, 1987, explosion caused by undetected buildup of HF acid spilling into the KOH treater in the alkylation unit at Mobil's 130,000 b/sd Torrance refinery. Backers of the measure wanted Mobil to switch to sulfuric acid in alkylation, a change that would have cost it $100 million.

A multiclient study is starting that will identify relevant features of the environmental debate for energy and oil planners and examine potential consequences of policy actions on the pattern of energy use.

Petroleum Economics Ltd., London, and Bonner & Moore Management Science, Houston, hope to publish the study this spring.

Meantime, a coalition-the American Energy Assurance Council-has been formed to develop a strategy to prevent "looming energy and environmental crises."

The group, which includes government officials, energy producers, and environmentalists, will use a consensus building method developed by Massachusetts Institute of Technology and Harvard University. It will meet in May to forge a national energy strategy.

Amoco Chemical Co. will add a 300 million lb/year polypropylene unit at its Chocolate Bayou plant near Alvin, Tex., by 1992. The company's plants at the site currently produce more than 800 million lb/year of polypropylene.

Economic reforms are brightening prospects for foreign investment in Latin America (see story, p. 18).

Latest target for privatization may be parts of Brazil's Petroleos Brasileiro SA under that country's new government.

President-elect Fernando Collor de Mello, to take office Mar. 15, has named former Petrobras Pres. Ozires Silva minister of the new Ministry of Infrastructure, which resulted from the merger of Mines and Energy and Transportation and Communications ministries.

The ministry will administrate 145 of Brazil's 237 state companies, responsible for 50% of domestic industrial output and 80% of Brazilian state companies' 1990 budget of $11 billion.

Silva reportedly favors privatizing certain subsidiaries of Petrobras, including petrochemical and fertilizer units, and generally wants to shut down or sell to the private sector any inefficient or money-losing state companies.

Petrobras has had severe financial difficulties in recent years (OGJ, Feb. 12, p. 17). As Petrobras president, Silva favored risk contracts for E&P for foreign and domestic companies--now forbidden by the new constitution.

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