U. S. BRIEFS

SPILLS

JAPANESE FLAGGED Tenyo Maru fishing vessel collided with the Chinese freighter Tuo Hai July 22 and sank off Washington's northwest tip, causing a spill extending 40-50 miles and reaching Shi Shi Beach in Olympic National Park. The Tenyo Maru carried 273,214 gal of bunker fuel and 91,071 gal of diesel fuel. The spill was estimated to be about 100,000 gal, killing scores of sea birds and threatening mammals in the area. Oil skimmers had collected about 21,000 gal of oil and water by July 28.

ALTERNATE FUELS

CARGILL, Minneapolis, plans to build a $30 million, 28.5 million gal/year ethanol refinery at its corn wet milling plant in Eddyville, Iowa. Construction is to begin within 30 days and be complete in late 1992. Ethanol production at the corn fueled plant will result in an 11 million bu/year increase in corn needs.

GAS PROCESSING

ENTERPRISE PRODUCTS CO., Houston, plans to expand natural gas liquids fractionators at its Mont Belvieu, Tex., plant, increasing fractionation capacity by about 30,000 b/d to 165,000 b/d by second quarter 1992. Enterprise operates two fractionators at its Mont Belvieu complex. The planned expansion will nearly double the capacity of the smaller, 35,000 b/d unit.

COMPANIES

LOUISIANA LAND & EXPLORATION CO. and Texaco Inc. agreed to resolve all outstanding litigation between them on undisclosed terms. Actions dismissed include those relating to Texaco's effort to recover from LL&E portions of payments it made to the Department of Energy in settlement of oil price overcharge claims. LL&E is dismissing claims against Texaco over alleged gas royalty underpayments. LL&E said the settlement involves no cash outlay by either company.

NYCAL CORP., Washington, D.C., purchased 3,626,775 shares, or 35.1%, of the common stock of Gulf Resources & Chemical Corp. for $34 million. Three Nycal directors were appointed to the board of Gulf, and three incumbent independent members of the Gulf board will remain.

INTERNATIONAL EUROTEC LTD., Dublin, Ireland, bought Nycal's 82% interest in Woodbine Petroleum Inc. for $3.5 million. Nycal bought its Woodbine interest in October 1990 for about $1.85 million.

HALLWOOD ENERGY PARTNERS LP, Denver, will appeal the judgment of the U.S. District Court for the Eastern District of Louisiana, which reduced a jury award of $48.496 million to Hallwood subsidiary Concise Oil & Gas Partnership, Austral Oil Co. Inc., and Energy Consultants Inc. against Louisiana Intrastate Gas Corp. The suit arose in a dispute over claims under a gas purchase contract (OGJ, Feb. 18, p. 34). The district court affirmed $22.538 million of the award. Louisiana Intrastate also is appealing the judgment.

ENVIRONMENT

OCCIDENTAL CHEMICAL CORP., Dallas, plans to construct a $5 million, 40 million lb/year plastics recycling plant in Dallas, which will be Texas' largest postconsumer recycling unit. It will process and pelletize high density polyethylene, polyvinyl chloride, and polyethylene terephthalate. Recycled HOPE will be used to expand a new Oxy line of products in detergent bottles and grocery bag film. Recycled PVC will be used for packaging nonconsumables.

PETROCHEMICALS

OXYCHEM plans to build a 1,875 b/cd methyl tertiary butyl ether plant based on ARCO Chemical Corp. technology using isobutylene feedstock at its Chocolate Bayou, Tex., petrochemical complex. Start-up of the new production in fourth quarter 1992 will more than double OxyChem's MTBE marketing capacity to more than 3,500 b/cd.

WESTLAKE PETROCHEMICALS CORP. started up its 453,700 metric ton/year ethylene plant at Lake Charles, La., which uses M.W. Kellogg Co.'s millisecond furnace technology. Construction started in July 1989 and was complete last spring.

AMOCO CHEMICAL CO. let contract worth about $2 million to Bonner & Moore Consulting Services, Houston, to install customized, automated, management software at seven U.S. chemical plants. The contract includes employee training, consulting services, and conversion of existing Amoco data. The upgrade is expected to take about 2 years. Bonner & Moore management systems will track maintenance, storage, and purchasing at Amoco plants in Joliet, III., Whiting, Ind., Mount Pleasant, S.C., Decatur, Ala., and Texas City, Alvin, and Baytown, Tex.

PIPELINES

A JOINT VENTURE of Reliance Gas Marketing Co. and Anadarko Gathering Co. will build the Limestone Ridge Gas Gathering System southeast of Wilburton, Okla., in Latimer County to gather as much as 1 20 MMcfd of gas produced from the Pennsylvanian Spiro-Wapanucka play. Reliance will own 57% of the 81/2 mile, 8-10 in. system. Anadarko will own the remaining 43%.

GATEWAY PIPELINE CO., a subsidiary of United Gas Pipe Line Co., Houston, received Federal Energy Regulatory Commission clearance to lay a 25 mile, 30 in. pipeline to carry as much as 600 MMcfd of gas from treatment plants in southern Mobile County, Ala., to United's 30 in. Lirette pipeline. The connection, expected to be in service by yearend 1991, will provide United with access to gas brought ashore at Bayou LaBatre terminal from wells in Mobile Bay. Capacity of the $22 million line can be increased to 1.2 bcfd by adding compression.

PANHANDLE EASTERN PIPE LINE CO. and Trunkline Gas Co. propose to resolve FERC Order 528 issues by recovering portions of take or pay settlement and contract reformation costs through a combination of direct billing, refund offsets, and a volumetric surcharge on future sales and transportation. Costs would be allocated among customers with sales contracts or firm transportation converted from sales contracts. A court had invalidated recovering TOP costs by directly billing customers based on purchase patterns prior to FERC Order 500.

REFINING

ENVIRONMENTAL PROTECTION AGENCY proposed a revision to the Clean Air Act amendments requiring all highway diesel fuel to comply with the maximum sulfur content standard of 0.05 wt % effective Oct. 1, 1993. Also proposed is elimination of the 2 year extension for small refiners. EPA conducted a hearing on the proposal Aug. 2 and is accepting written comments until Sept. 3.

SUN REFINING & MARKETING CO. and Sinclair Refinery, both with major refinery operations in Tulsa, lowered the Reid vapor pressure of gasoline sold in Tulsa to 8.5 psi from 9.5 psi in an effort to keep Tulsa in compliance with federal ozone standards. Most of Tulsa's service stations will sell the less volatile gasoline, expected to reduce hydrocarbons and ozone, the pollutant that put Tulsa on the Environmental Protection Agency's dirty air list.

CONOCO INC. in 1990 reduced toxic air emissions from its five U.S. refineries by 47%, compared with 1988 emissions, surpassing a major environmental goal more than 2 years ahead of schedule. Last year, Conoco committed to reducing 1988 toxic air emissions by 35% before yearend 1993. The 47% reduction was calculated from data submitted annually to EPA.

UOP, Des Plaines, III., will license Exxon Research & Engineering Co.'s wet gas scrubbing (WGS) process to licensees of its fluid catalytic cracking and reduced crude cracking processes. Under the agreement, Exxon can license UOP catalyst coolers to licensees of its resid fluid catalytic cracking process. The WGS process removes sulfur dioxide and particulates from FCC flue gas. The UOP catalyst cooler is a variable heat removal system.

ACQUISITIONS

AMAX OIL & GAS INC., Houston, completed acquisition on May 31 of Ladd Petroleum Corp., Denver, increasing its gas reserves to 1 tcf in 26 U.S. states and three Canadian provinces.

PATRIOT SHIPPING INC. completed the acquisition of Cleveland Tankers Inc., from Ashland Oil Inc. for an undisclosed sum (OGJ, May 20, p. 34) and will now be known as Cleveland Tankers (1991) Inc. Cleveland will continue the 50 year old business of its predecessor, transporting heavy fuel oil, asphalt, gasoline, distillate, petrochemicals, commodity chemicals and fertilizers throughout the Great Lakes and St. Lawrence Seaway and has entered into time charters of the two tankers with Enerchem USA Inc.

ALEXANDER ENERGY CORP. and Bradmar Petroleum Corp., both of Oklahoma City, agreed in principle for Alexander to acquire Bradmar for $9.734 million. The transaction is subject to execution of a definitive agreement, financing, and approvals of both company's boards of directors and shareholders. It is expected to be complete by yearend.

DRILLING-PRODUCTION

NORCEN EXPLORER INC., Houston, began production from its Platform A on Eugene Island Block 142 in 50 ft of water 30 miles off Louisiana in the Gulf of Mexico. Stabilized production is 4,000 b/d of oil and 13.5 MMcfd of gas. Norcen holds a 60% interest, Petrobras America Inc. 40%.

SANTA FE ENERGY RESOURCES INC., Houston, in October will begin receiving 10,000 b/d of steam from Coalinga Cogeneration Co., or about 60% of Santa Fe's requirements for thermal enhanced oil recovery operations near Coalinga, Calif. Santa Fe expects to save about $1 million/year throughout the 15 year life of the agreement with Coalinga Cogen because of indexed pricing provisions. Coalinga Cogen is a partnership of subsidiaries of Texaco Inc. and Mission Energy Co., Bakersfield, Calif.

PACIFIC ENTERPRISES OIL CO., Los Angeles, 13-17 SE Russian Creek, 17-141n-95w, Dunn County, N.D., confirmed an extension of Simon Butte oil field in the Williston basin. The well initially flowed 570 b/d through 8/64 in. choke with 1,400 psi flowing tubing pressure from Silurian Interlake at 11500-528 ft. Currently flowing 840 b/d through a 14/64 in. choke at 760 psi, the well has produced more than 100,000 bbl since March at rates as high as 1700 b/d. Plans call for two more wells in the field this year.

KAISER-FRANCIS OIL CO., Tulsa, purchased interests in 130 oil and gas leases in six states from Conquest Exploration Co. for $2.2 million. Reserves are estimated at 83,000 bbl of oil and 2.7 bcf of gas.

DEVON ENERGY CORP., Oklahoma City, increased its proved oil and gas reserves estimates about 17% to 226.9 bcf of gas equivalent as of June 30, compared with yearend 1990. Main contributor to the reserve increase was a 38.8 bcf rise in the reserve estimate of its Northeast Blanco Unit in Northwest New Mexico, now pegged at 149.3 bcf. Most reserves there are associated with Devon's 102 well coal seam gas project.

ANADARKO PETROLEUM CORP., Houston, expects revisions and additions to its proved energy reserves during 1991 will exceed estimated 1991 production volumes for the 10th consecutive year. Andarko increased its estimated gas reserves in Hugoton field of Kansas by 120 bcf. It owns interests in 676 gas wells in the field. Anadarko also expects a net reserve increase of 9 million bbl of oil equivalent as a result of studies related to its natural gas liquids reserves.

CHESAPEAKE OPERATING INC., Oklahoma City, has five horizontal Cretaceous Austin chalk wells producing 3,800 b/d of oil in First Shot field of South Texas. The company is completing two more wells and is drilling two others, Chesapeake, among the five most active horizontal well operators in the U.S., plans to drill 20 more in the field during the next 12 months.

EXXON CO. U.S.A. will accept bids for its interests in 104 producing leases in East Texas and the Gulf Coast area. The leases are divided into 21 packages and subpackages for bidding. Bids are due Sept. 20 and must be cash only.

EBCO RESOURCES INC. will auction 130 of Exxon producing leases in four states at a no minimum bid sale Aug. 28 in Dallas.

CONOCO INC. offered to sell its interests in certain operated and nonoperated producing leases in Texas and New Mexico. Offers are due Aug. 28. Effective date of sales will be Sept. 1.

GOVERNMENT

MINERALS MANAGEMENT SERVICE proposed a rule that would allow producers to credit royalty overpayments on one federal lease against underpayments on another. The rule would apply if production is reported from one lease when it should have been attributed to another.

EXPLORATION

MMS scheduled a Chukchi Sea lease sale for Aug. 28 in Anchorage. The sale will offer 3,454 blocks totaling 18 million acres 22-216 miles off Alaska's arctic coast in 98-263 ft of water. Blocks will be offered for 12.5% royalties and 10 year terms.