INDUSTRY BRIEFS

SPILLS

AMOCO OIL CO. and Marine Pollution Control, Detroit, teamed to provide Michigan and surrounding waters with a stronger level of oil pollution protection, positioning response equipment throughout the state. Containers of oil spill containment boom, oil absorbent materials, and support equipment have been placed in Amoco products terminals at Bay City, Escanaba, Sheboygan, and Muskegon, Mich.

PETROCHEMICALS

ASHLAND CHEMICAL INC. agreed to acquire most of Unocal Corp.'s U.S. chemical distribution business for about $90 million. The operation involves distribution of chemicals, hydrocarbon solvents, and specialty ingredients through a national network of centers. The deal was to close Feb. 28.

TRANSPORTATION

IROQUOIS GAS TRANSMISSION SYSTEM filed an amendment with a federal district court in Syracuse, N.Y., to its lawsuit against New York State Public Service Commission that seeks to confirm Iroquois as a federal. not state, regulated entity. The amendment said efforts to resolve the matter out of court have been unsuccessful. Iroquois filed suit after New York Department of Environmental Conservation officers arrested workers constructing a river crossing (OGJ, Oct. 21, 1991, p. 38).

FEDERAL ENERGY REGULATORY COMMISSION approved Northern Border Pipeline Co.'s request to expand capacity of its 822 mile pipeline from the Canadian border to Ventura, Iowa, via added compression and purchase of Natural Gas Pipeline Co. of America's Iowa line (OGJ, Mar. 11 , 1991, p. 46). FERC also approved Northwest Pipeline Corp.'s amended request to increase capacity by 433 MMcfd (OGJ, Oct. 14, 1991, p. 38), backed by 15 year contracts for Canadian and U.S. supplies.

NOVA CORP., Calgary, placed orders with Stelco Inc. worth $110 million for pipe required to expand its gas pipeline system for the California market.

UNION PACIFIC RAILROAD granted Pacific Gas & Electric Co. permanent easements for gas and electrical power lines crossing the railroad's rights-of-way. The agreement, which took 3 years to negotiate, covers all UP rail lines through PG&E's 94,000 sq mile service territory. PG&E will notify the railroad when it determines utility or gas lines must cross Union Pacific ROWS, and PG&E will submit a permanent easement form to the railroad and a negotiable fee of $500.

MOSS BLUFF GAS STORAGE SYSTEMS, a joint venture of units of Phibro Energy Inc. and Tejas Power Corp., both of Houston, let contract to Sofregaz U.S. Inc. to provide design management and construction of a second natural gas storage cavern at its storage site in Liberty County, Tex. The cavern is designed to store 3.7 bcf of gas with working capacity of 2.9 bcf. Storage well drilling is in progress. Cavern leaching will begin in April.

COGENERATION

ALBERTA NATURAL GAS CO., Calgary, and TransAlta Resources Investment Corp. plan a $150 million gas fired cogeneration plant near Crowsnest Pass, B.C. The companies have a preliminary agreement to provide 130,000 kw of electricity for 30 years beginning in 1996 to the Sacramento Municipal Utility District in California. Construction will begin in 1994.

SUMAS COGENERATION CO., a joint venture of National Energy Systems Co. and Calpine Corp., received $135 million in financing from Prudential Power Funding and Credit Suisse for a 1 20,000 kw gas fired cogeneration plant to be built at Sumas. Wash. The plant will use General Electric combined cycle gas turbine technology to produce electricity for Puget Sound Power & Light Co. and steam for an adjacent lumber dry kiln plant. The plant is to be operating by May 1993.

ARCO GAS agreed to supply Air Products & Chemicals Inc. as much as 24 MMcfd of natural gas for 20 years on a firm basis for a proposed 120,000 kw cogeneration plant at Orlando, Fla. ARCO is to begin gas deliveries in 1 994. Electricity from the plant will be sold to Florida Power Corp. and the Reedy Creek Improvement District under long term contracts. Steam will be used by an Air Products air separation plant at an adjacent site.

REFINING

LYONDELL PETROCHEMICAL CO. restarted the main crude oil distillation unit at its Houston refinery and increased throughput to about 220,000 b/d. With return to service in mid-March 1992 of the plant's fluid catalytic cracking unit, crude runs are expected to reach 265,000 b/d. Lyondell took the FCC unit out of service in mid-January for maintenance and upgrading after a fire reduced crude runs by about 100,000 b/d (OGJ, Jan. 27, p. 44).

PETRO STAR let contract to Harris Group Inc., Seattle, to design a 30,000 b/d refinery near the Valdez terminus of the Trans-Alaska Pipeline System (OGJ, Feb. 24, p. 32). The project is being developed by Petro Star Valdez Refinery Joint Venture, which includes Petro Star, Alaska Refining Inc., and Harbor Enterprises.

GIANT INDUSTRIES INC., Scottsdale, Ariz., projects capital outlays of $10.4 million in 1992, down 66% from 1991. Most spending will be to meet requirements under 1990 Clean Air Act amendments, including construction of a diesel hydrotreater at its 20,000 b/d Ciniza refinery near Gallup, N.M., to be in service by the October 1993 CAA compliance deadline for diesel desulfurization.

COMPANIES

UNOCAL CORP. and its 96% owned indirect subsidiary Unocal Exploration Corp. (UEX) agreed to merge. UEX will merge with Union Oil Co. of California, a wholly owned subsidiary of Unocal. UEX stockholders will receive 0.54 share of Unocal common stock for each of their shares. Unocal expects the merger to be complete by May 2.

DU PONT and its Conoco Inc. unit registered a new company in the Russian republic. Du Pont Russia is authorized to purchase, sell, manufacture, import, and export products. About 30 Du Pont and Conoco employees will staff the office in Moscow.

PANCANADIAN PETROLEUM LTD., Calgary, laid off 132 employees and completed a voluntary retirement program for another 83.

TESORO PETROLEUM CORP., San Antonio, started a cost cutting program that includes reducing the number of employees, closing some offices, streamlining company operations, and elimination or reduction of certain expenses. When complete, the program is expected to cut costs by more than $11 million/year.

TANKERS

CHEVRON CORP. dedicated its 150,000 dwt William E. Crain tanker Feb. 26, the fourth and last tanker built for it under a contract with Mitsui & Co. and Ishikawajima Harima Heavy Industries Co. Ltd. (OGJ, Oct. 14, 1991, p. 40). The tankers are replacing older vessels as part of a continuing fleet retirement and renewal program. Chevron's worldwide tanker fleet now totals 42. The William E. Crain will carry about 1.1 million bbl of crude on each voyage.

A SHELL OIL CO. tanker carrying about 20,000 bbl of crude sank in the Gulf of Mexico off Yucatan Feb. 9, causing an oil slick 25 km long and 15 km wide. By Feb. 17 the slick had moved to within 10 km of the Mexican shoreline. Mexico's Environmental Protection Ministry said environmental damage and financial loss could not yet be determined.

EXPLORATION

SPAIN'S Ministry of Industry, Commerce, and Tourism awarded a permit to Union Texas Espana Inc. for a 6 year program to explore for and produce coalbed methane on the 373 sq km Asturias Central prospect in northern Spain. Union Texas plans to spend about $2 million in the first 3 years and drill at least one wildcat this year on the Asturias Central or Villamanin prospect in Leon province, where it received a hydrocarbon permit last summer (OGJ, Aug. 19, 1991, Newsletter).

NEW ZEALAND granted American Exploration Co., Houston, a 22 month extension of an exploration license on the 1.7 million acre PPL 38321 block in Hawke Bay off the east coast of North Island to allow time for more evaluation. American's 1992-93 program includes geologic mapping, reprocessing seismic data, and gathering and processing multichannel seismic data. It holds a 100% interest in the license and must decide by Aug. 1, 1993, whether to drill a wildcat.

INDONESIA awarded its first production sharing contracts of 1992 in early February (OGJ, Feb. 17, p. 37). Indonesia's Risjad Salim Resources International will explore the 2,070 sq km Bontang block in East Kalimantan and spend at least $36 million the first 10 years of exploration. Maxus Southeast Sumatra received an amendment to its contract, allowing it to explore a 14,734 sq km area in Sumatra. Maxus could spend as much as $75 million through 2001.

MARAVEN SA'S SLA-7-1X wildcat gauged 2,000 b/d of 31, gravity oil in Block A of southern Lake Maracaibo, Venezuela. The well was drilled to 18,208 ft in Cretaceous limestone. Initial reserves estimate is 50 million bbl.

MOBIL OIL CANADA'S Fontas River 15-33-102-11w6 wildcat, 238 km northwest of Peace River in western Canada, flowed 5.2 MMcfd of sweet dry gas from three zones in Mississippian Debolt at 2,624-2,703 ft. Total depth is 8,718 ft. Mobil holds 100% interest in the well and owns 33 sections in the immediate area, where it has drilled three appraisal wells that are being evaluated.

A GROUP led by OMV (Pakistan) Exploration GmbH was awarded a fifth exploration block in the Riwat area of Pakistan's Potwar basin southeast of Islamabad. The group includes Hardy Oil & Gas (U.K.) Ltd. and Oil & Gas Development Corp. It is committed to a 400 line km seismic program and will drill three wells.

MINERALS MANAGEMENT SERVICE issued a call for information and nominations and a notice of intent to prepare an environmental impact statement for an oil and gas lease sale in Alaska's Cook Inlet (OGJ, Jan. 13, p. 22). Sale 149 is tentatively scheduled for mid-1994. MMS will accept nominations until Mar. 23, 1992.

OILSANDS

JAPEX OIL SANDS LTD., a unit of Japan Petroleum Exploration Co. Ltd., acquired an 8.3% interest in the $71 million (Canadian) pilot program being developed by Canada's Alberta Oil Sands Technology & Research Authority that is using horizontal wells and steam injection to produce heavy oil (OGJ, July 15, 1991, p. 31).

DRILLING-PRODUCTION

OMAN'S National Drilling & Services Co. completed drilling 25 wells in Lekhwair oil field on schedule, part of a $500 million waterflood project (OGJ, July 29, 1991, p. 38) under a contract from Petroleum Development Oman (PDO). PDO plans to boost production in the field to 120,000 b/d from 20,000 b/d. Initially 112 wells are planned, with an option for 56 more. Wells being drilled are dual and single completion producers and dual and single injectors. All 168 wells are to be drilled by yearend 1994.

READING A BATES CORP., Houston, acquired an added 8.6 million shares of Arcade Shipping AS, bringing its total ownership interest to about 45% of Arcade's outstanding voting shares. Reading & Bates also acquired a majority representation on the Arcade board of directors. Arcade holds about 46% of Arcade Drilling AS, which owns the Henry Goodrich and Arcade Frontier semisubmersible rigs.

ARCO ALASKA INC., BP Exploration (Alaska) Inc., U.S. Environmental Protection Agency, Center for Global Change, Natural Resources Defense Council, and Friends of the Earth U.S.A. agreed to cooperate toward halting halon production. They plan to facilitate use of recycled halon where necessary and develop halon alternatives. The 1990 Clean Air Act amendments phase out halon production by 2000 but allow Alaska's North Slope an extension as essential to arctic production facilities.

FUEL RESOURCES INC. (FRI), a unit of Brooklyn Union Gas Co., Brooklyn, N.Y.; and Solex Energy Ltd., Calgary, formed a company for natural gas development in Alberta. FRI and Solex will share ownership in Solex Energy Corp. Brooklyn Union is part owner of the Iroquois Gas Transmission System currently delivering gas from western Canada to the U.S. Northeast.

GERRITY OIL & GAS CORP., Denver, agreed to buy most of the energy assets of Coors Energy Co., Golden, Colo., for $15.3 million. The deal, scheduled to close Apr. 1, includes 308 producing wells in the Waftenberg area of the Denver-Julesberg basin, interests in 700 undrilled locations, about 200 miles of gathering line, and an 8 MMcfd gas processing plant.

BRITISH ENERGY MINISTER Colin Moynihan said $7.5 billion in new projects were approved in 1991 and projects worth $4.8 billion were under consideration, not $7.5 million in new projects and $4.8 million under consideration, as incorrectly reported (OGJ, Jan. 6, p. 36).

MARKETING

COASTAL CORP. introduced three unleaded grades and one leaded grade of 10% blended ethanol gasoline to most Coastal Mart retail service stations in Colorado. Coastal's Next Generation Fuels are available in unleaded blends with octanes of 85, 88, and 91, and an 88 octane regular for vehicles burning leaded fuel. The company introduced the fuels in Kansas last fall.