U.S. BRIEFS

COMPANIES

SOUTHWESTERN ENERGY CO., Fayetteville, Ark., will hike 1991 capital spending to $48.1 million from an original budget of $32.2 million. The revised amount in-cludes $37.9 million for exploration and production, $9.5 million for utility system expenses, and $700,000 for other expenses.

REFINING

EXXON CO. U.S.A. let a contract to Jacobs Engineering Group Inc., Pasadena, Calif., for construction and engineering services for a 7,000 b/sd methyl tertiary butyl ether unit at its Baton Rouge, La., refinery. Ground will be broken in about 6 months, with project completion scheduled in 14-18 months.

SUN REFINING & MARKETING CO. let a contract to Jacobs Engineering Group Inc. to modify and upgrade the wastewater purification unit at its Tulsa refinery. The contract includes adding two 75,000 bbl storage tanks with secondary containment for spill diversion, realignment of a secondary dissolved air flotation unit, and possible addition of a third clarifier. Jacobs also will perform waste minimization studies at the Tulsa refinery and other Sun refineries.

LANDMARK PETROLEUM INC., Fruita, Colo., completed start-up of all units at its 16,000 b/d Fruita refinery. Landmark bought the mothballed refinery in November 1990 and has been working toward start-up since March.

TRANSPORTATION

EXXON CORP.'S cleanup of the Mar. 24, 1989, Exxon Valdez spill off Alaska may be complete by the first week in July, ahead of schedule. Work this season began June 1, and cleanup of slightly more than half the 91 targeted sites has been completed. Prince William Sound has 71 sites, the rest are in the Gulf of Alaska.

SUN PIPE LINE CO. leased its 50,000 b/d products terminal at West Memphis, Ark., and associated 12 in., 90 mile, 70,000 b/d pipeline to Truman Arnold Cos., Texarkana, Tex. Truman Arnold will operate the terminal. Texas Eastern Products Pipeline Co.'s Teppco Partners LP, Houston, will operate the West Memphis-McRae, Ark., pipeline, which connects with its 4,100 mile system at MacRae. Teppco previously operated the West Memphis-McRae line jointly with Sun.

NATURAL GAS PIPELINE CO. OF AMERICA received Federal Energy Regulatory Commission approval June 12 for expansion of its Line AG in Oklahoma and Texas. Compression and looping will boost capacity on the line by 600 MMcfd.

ANR PIPELINE CO. received FERC approval June 12 for second phase construction of 30 miles of pipeline and 2,200 hp of compression and metering in Wisconsin, Illinois, and Ohio. The $17 million project had been awaiting environmental clearance since the first phase was approved in June 1990. Gas will move from fields in Texas, Louisiana, and Arkansas through facilities owned and operated by ANR, Trunkline Gas Co., Texas Gas Transmission, and Great Lakes Gas Transmission Corp. to the Lebanon, Ohio, hub.

LAKEHEAD PIPELINE CO., Superior, Wis., is being sued by 25 Grand Rapids, Minn., residents for $40 million over alleged negligence in a Mar. 3 line rupture. In addition, each property owner is seeking $50,000 in property damage. A break in the 34 in. oil pipeline caused a 38,500 bbl spill, with half the oil entering the Prairie River. The suit will test federal 1990 oil Pollution Act provisions granting citizens the right to sue pipelines for damages from spills.

ILLINOIS SUPREME COURT ruled the Illinois Commerce Commission does not have authority to review Illinois gas utilities' recovery of FERC approved, direct billed, take or pay costs. The action reverses a lower court decision and upholds a December 1988 ICC order.

FERC approved a 7.5% tariff increase requested by Kaneb Pipe Line Partners LP (KPP), effective June 1 . If KPP volumes remain constant, the new tariff rate is expected to generate $2.3 million/year of added revenues.

A JOINT VENTURE of KN Energy Inc., Lakewood, Colo., and Tom Brown Inc., Midland, Tex., plans to lay an 80 mile gas gathering system in Wyoming's Wind River basin to connect producers to markets served by KN's interstate pipeline. Construction is to start by yearend.

ENDEVCO INC., Dallas, agreed to acquire an 8 in., 122 mile products pipeline in Southwest Pennsylvania from an undisclosed company. The latter will provide equity and debt financing. Endevco's ownership will be at least 25% until Predetermined rates of return are achieved, then increase to 50%. Endevco plans to convert the line to a gas pipeline with initial capacity of about 60 MMcfd. Planned start-up is in November.

UNION PACIFIC FUELS INC. will sell 50 MMcfd of gas to the Los Angeles Department of Water & Power under a 15 year contract. Gas will move from Southwest Wyoming to Ladwp through Kern River Gas Transmission Co.'s pipeline system, expected to be in service by February 1992. The contract will supply about 35% of Ladwp's gas requirements and back out more than 8,000 b/d of fuel oil.

GAS PROCESSING

WARREN PETROLEUM CO. let a contract worth about $50 million to Davy McKee Corp., Houston, for engineering and procurement services on an isomerization unit and hydrotreater at its refractionation plant in Mont Belvieu, Tex. Completion is scheduled for early 1993. Davy's Dresser engineering division, Tulsa, will do the work.

PETROCHEMICALS

TEXACO CHEMICAL CO. plans to build a 400 million lb/year propylene oxide unit and expand capacity of the methyl tertiary butyl ether unit to 19,500 b/d from 4,500 b/d at its Port Neches, Tex., petrochemical complex. Texaco expects to complete the $400 million project in first quarter 1994.

INTERCONTINENTAL TERMINALS CO., Houston, and Phillips 66 Co. agreed to build refrigerated storage for 10,000 metric tons of polymer grade polypropylene at ITC's 175 acre storage terminal on the Houston Ship Channel at Deer Park, Tex. ITC will operate the facility, to be connected by pipeline to Phillips' Gulf Coast propylene distribution system. Completion is expected within 1 year.

ALTERNATE FUELS

DEPARTMENT OF ENERGY dropped support for a $225 million clean coal technology project to convert high sulfur coal to a clean burning liquid fuel. DOE said the sponsor, Ohio Clean Fuels Inc., Warren, Ohio, failed to secure financing or acquire a site for the project in the time allowed.

DOE and Westinghouse Electric Corp. started a $140 million program to speed commercialization of ceramic solid oxide fuel cells, which use zirconia ceramics to produce electricity and heat from the reaction between natural gas or synthetic gas from coal and oxygen and are virtually emission free.

LNG

HOUSTON METROPOLITAN TRANSIT AUTHORITY placed a $16 million order for 85 Starship Gemini transit buses with Stewart & Stevenson Services Inc. The 29 ft long buses will be powered by dual fueled engines capable of running on LNG or diesel. Delivery is to begin in the fourth quarter.

DRILLING-PRODUCTION

EXXON CO. U.S.A. began installing the first of three platform jackets for its Mobile Bay gas development project off Alabama (OGJ, Sept. 24, 1990, p. 46). Exxon expects to install decks and production facilities early in 1993 and begin producing Jurassic Norphlet gas the same year. Cost of the project, which includes a 300 MMcfd onshore gas treating plant, is about $1 billion.

FREEPORT-MCMORAN INC., New Orleans, agreed to sell about 38% of its oil and gas reserves to undisclosed buyers for about $500 million cash as part of a restructuring. The reserves, totaling 17.8 million bbl of oil and 288.6 bcf of gas, are in the offshore and onshore Gulf Coast area and in the Midcontinent. Freeport's remaining leases, also under study for possible sale, are mainly in the Gulf of Mexico, Beta and South Belridge fields in California, Niobrara field in Colorado, Lac Blanc field in Louisiana, and Bowdoin field in Montana.

TRANSCO EXPLORATION PARTNERS LTD. in early July will allow qualified bidders to review field data asso-ciated with its interests in Chalkley field, Cameron Parish, La., including four West Chalkley wells, each producing about 40 MMcfd of gas and 500 b/d of condensate. Bids will be due in September, with sale closing by yearend 1991. The sale would eliminate TXP's remaining oil and gas assets and liquidate the partnership.

PSI INC., Houston, installed a concrete gravity production platform on Ship Shoal Block 58 off Central Louisiana, the largest concrete gravity structure in Gulf of Mexico federal waters. Engicon Inc., Houston, handled engineering, construction, and installation of the platform, production facilities with capacity of about 1 500 b/d of oil and 15 MMcfd of gas, and a 9 mile pipeline.

EASTERN AMERICA ENERGY CORP. bought producing Appalachian basin leases from Edisto Resources Corp., Dallas, for about $33.6 million. The leases account for about 10% of Edisto's total proved reserves. Edisto considered the leases nonstrategic to its focus on the Gulf of Mexico and Midcontinent.

CASPEN OIL INC., Lakewood, Colo., acquired a 22% working interest in heavy oil reserves in California's Kern River field from undisclosed sellers. Nukern and Clare leases cover 86 acres with proved developed reserves of 4.5 million bbl. Sellers retained a 2.2% carried working interest and received 216,500 shares of newly authorized preferred shares of Caspen stock with liquidation preference of $1/share.

STONE PETROLEUM CORP., Lafayette, La., 1 Provost at Weeks Island in Iberia Parish, La., is producing a maximum allowable 670 b/d of oil from each of two Miocene 0 sands at 12,558-578 ft and 12,726-752 ft. Operator Stone has 51% interest in the discovery well and Nuevo Energy Co., Houston, 49%. A second well is planned for the third quarter.

KCS GROUP INC., Edison, N.J., acquired an 18% working interest in 1,237 net acres in Bay Springs oil and gas field, Jasper County, Miss., boosting its oil production by 150%. Three wells in the field produce a combined 2,500 b/d of oil and 4.2 MMcfd of gas with 2,400 psi average flowing tubing pressure from Jurassic Buckner at about 15,000 ft. KCS said Jurassic Cotton Valley and Smackover pays are behind the pipe. Three more wells are planned.

GENERAL ACCOUNTING OFFICE said Minerals Management Service's Mar. 1, 1988, revision of its oil and gas valuation rules, used in determining royalty amounts, has not affected revenues. States and Indian tribes had feared the new rules would cause their share of federal royalties to decrease.

DEPARTMENT OF ENERGY proposed a $7 million settlement with Eason Drilling Co., formerly Eason Oil Co., and former parent ITT Corp. The agreement would resolve allegations Eason failed to comply with federal petroleum pricing and allocation rules during Nov. 1, 1973-Dec. 31, 1979. In agreeing to the settlement, Eason did not admit any violations.

SANGUINE LTD., Tulsa, confirmed two gas discoveries in Roger Mills County, Okla., reported working interest owner Pacific Enterprises Oil Co., Los Angeles. The 1-16 Nettie Boggs step-out in the North Berlin field area flowed more than 13 MMcfd through a 13.5/64 in. choke with 10,000 psi flowing tubing pressure from Pennsylvanian Upper Morrow Hollis A at 17,080-106 ft. The 1-13 Marsha step-out in the North Sweetwater field area flowed a combined volume of more than 10 MMcfd through an 11/64 in. choke with 10,725 psi flowing tubing pressure from pay at 16,860-880 and 16,909-922 ft.

EBCO U.S.A. INC. will auction 400 oil and gas leases in 10 states at a no minimum bid sale July 18 in Dallas.

COGENERATION

DESTEC ENERGY INC. plans a 388,000 kw, gas fired cogeneration plant to supply electrical power and steam to three existing and two planned processing units at Dow Chemical Co.'s Freeport, Tex chemical complex. About 100,000 kw of power from the plant will be available for sale through a Destec affiliate. Construction is to begin in 1992, with completion set for 1994.

GUY F. ATKINSON CO., San Francisco, let a $92.5 million contract to its Walsh Construction Co. unit for a 49,500 kw cogeneration plant at Billings, Mont. The plant, owned by Billings Generation Inc., will burn petroleum coke from Exxon Co. U.S.A.'s Billings refinery to produce steam and power using circulating fluidized bed technology. Exxon's refinery will take the steam, Montana Power Go. the electricity. Plant completion is scheduled for December 1993.

GOVERNMENT

INTERNAL REVENUE SERVICE issued final rules for floor stocks taxes on gasoline, diesel, and aviation fuel held as of Dec. 1 , 1990. The 1990 Revenue Recon-ciliation Act established the added taxes. The rules were issued in the June 4 Federal Register.