U.S. BRIEFS

COMPANIES

SOUTHERN CALIFORNIA GAS CO. plans to buy 300 MMcfd of spot gas for December for a weighted average price of $2.14/MMBTU. SoCalGas paid an average $1.92/MMBTU for 218 MMcfd of November spot gas through Nov. 19.

SHAREHOLDERS of Arkla Inc., Shreveport, and Diversified Energies Inc., Minneapolis, approved the $630 million merger of DEI into Arkla (OGJ, Aug. 6, p. 34).

CHEVRON CHEMICAL CO. is seeking offers for its fertilizer division, which sells 450,000 tons/year of phosphate fertilizer and 1 million tons/year of nitrogen fertilizer. The division includes a phosphate plant in Rock Springs, Wyo., and nitrogen fertilizer plants in St. Helens, Ore., Kennewick/Finley, Wash., and Richmond, Calif.

LNG

YUKON PACIFIC CORP., Anchorage, Alas., let contract to Bechtel Corp., Houston, for design of the first phase of its proposed natural gas liquefaction plant and marine terminal at Anderson Bay, Alas., near Valdez, part of YPC's Trans-Alaska Gas System project to export LNG to Japan, South Korea, and China. YPC said the LNG plant will be the largest of its kind when all phases are complete.

REFINING

TEXACO INC. will build a diesel hydrotreater complex at its El Dorado, Kan., refinery to meet proposed Environmental Protection Agency sulfur content standards for highway diesel fuel. The complex, to cost about $125 million, will include diesel hydrotreating, hydrogen generation, sulfur recovery, and sulfur plant tail gas treating units. Texaco expects construction to begin in early 1991 and be complete in early 1993.

QUAKER STATE CORP. introduced a line of synthetic products under the name Synquest-5W-50 motor oil, 5W-40 blend motor oil, 75W-90 gear lubricant, and NLGI No. 2 grease.

GAMXX ENERGY INC., Blue Bell, Pa., plans to restart the 26,500 b/d Theodore, Ala., refinery formerly owned by Marion Corp. It will produce mostly military jet fuel, diesel fuel, and gasoline.

COURTS

DELAWARE CHANCERY COURT awarded $30 million to 20,000 former Shell Oil Co. stockholders after ruling in June that Shell failed to fully disclose $1 billion in oil and gas reserves during its 1985 merger into the Royal Dutch/Shell Group (OGJ, July 2, p. 48). The judge found stockholders are entitled to another $2/share for the 15 million shares they relinquished.

A FEDERAL JURY in Newark, N.J., ruled Mobil Chemical Co. must pay former environmental officer Valcar Bowman Jr. $375,000 actual and $1 million punitive damages after finding Mobil wrongfully dismissed Bowman in 1986. Mobil plans to appeal.

RESEARCH

GAS RESEARCH INSTITUTE chose Oklahoma University, Norman, Okla., as the site of a research project to build a device that simulates the path of hydraulic fracturing fluids. GRI will provide about $12 million in funding, and OU and three subcontractors will commit another $4.7 million.

DRILLING-PRODUCTION

TEXAS RAILROAD COMMISSION raised the production allowable in East Texas field to 100% from 86% to comply with a state district court's temporary injunction while it appeals the court's decision. TRC also let expire a 90 day emergency order issued in August that had allowed oil companies to produce at maximum efficient rate.

ARCO OIL & GAS CO. agreed to buy all oil leases of Oryx Energy Co., Dallas, in Midway-Sunset field, Kern County, Calif., for $588 million cash and $54 million in assumed debt. The purchase of 1,270 wells producing a net 23,000 b/d also covers most of Oryx's interest in the 225,000 kw Midway-Sunset Cogeneration Co. plant.

ALEXANDER ENERGY CORP., Oklahoma City, will begin a 30 well, $28.5 million drilling program in Burleson County, Tex., after it received a $2.1 million commitment from John Hancock Mutual Life Insurance Co. to drill the first eight horizontal wells. The partnership of Alexander and John Hancock, AEJH 1987 LP, will assume $5.5 million, about 20%, of the Cretaceous Austin chalk drilling project's total cost.

SAMEDAN OIL CORP., Ardmore, Okla., 4 OCS-G 4818 well off Louisiana flowed 10.6 MMcfd of gas and 77 b/d of condensate through a 27/64 in. choke with 2,574 psi flowing tubing pressure from 110 ft of I sand pay. The well, drilled to 8,700 ft, is in West Cameron Block 290 about 1,700 ft from the 3 A-1 producing well.

PATRICK PETROLEUM CO., Jackson, Mich., bought another working interest in Chacahoula field, Lafourche Parish, La., with proved reserves of 360,000 bbl of oil and 418 MMcf of gas, along with two undeveloped tracts, for $3.15 million. Patrick also signed a letter of intent to buy 2,600 bbl and 1.233 bcf of proved reserves in Terrebonne Parish, La.

KP EXPLORATION INC., Houston, bought producing leases in Matagorda and Smith counties, Tex., for a total of about $3.4 million. Acquired reserves are about 500,000 bbl of oil and 700 MMcf of gas.

PIPELINES

SOUTHERN CALIFORNIA GAS CO. put its $40 million southern system expansion project on stream, boosting its throughput capacity at the California-Arizona border by 200 MMcfd from 1.75 bcfd. It entailed adding about 41 miles of 36 in. line between Blythe and Chino, Calif. Added capacity is designed to boost transportation service for large industrial/commercial customers.

IROQUOIS GAS TRANSMISSION SYSTEM ordered 270 miles of 30 and 24 in. steel pipe from Stelco Inc. unit Stelpipe for its proposed 370 mile Iroquois pipeline. The pipe, to cost $91 million, will be designed to operate at a maximum 1,440 psi. Each section will be tested at 25-90% above operating pressure by Stelpipe's Welland, Ont., mill.

ALYESKA PIPELINE SERVICE CO. shut down its trans-Alaska crude oil pipeline for 5 hr Nov. 20 to place a structural sleeve on a corroded section of pipe in the Brooks Range. During the shutdown, producers delivered about 50,000 b/d to pump station 1, where it was placed in storage.

GULF STATES UTILITIES GO. plans to fund an $88.4 million, 10 bcf gas storage facility near its 1.91 million kw Sabine Station gas fired power plant outside Bridge City, Tex., by leaching salt domes. Sabine Gas Transmission Co. will build the facility, which will include a 12 mile pipeline linking the power plant to two storage caverns. GSU will use it to stockpile gas when market prices are low, which the utility says will save about $171 million during 10 years.