INDUSTRY BRIEFS

LNG

Pine Needle LNG Co. intends to add Public Service Co. of North Carolina Inc. and North Carolina Natural Gas Corp. to the limited liability company formed by units of Transcontinental Gas Pipe Line Corp. and Piedmont Natural Gas Co. Inc. The company plans to seek approval from the Federal Energy Regulatory Commission to build, own, and operate a $107 million liquefied natural gas peak demand plant in North Carolina (OGJ, June 12, p. 44).

Lubricants

Pennzoil Products Co., Houston, agreed to buy for an undisclosed sum the Viscosity Oil Co. division of Case Corp. Viscositys revenues are about $50 million/year. The deal includes a long term supply agreement for Pennzoil to supply aftermarket and factory fill lubricants to Case. Viscosity supplies most of the factory fill lubricants for Cases dealer network and most of the factory fill lubricants for Cases North American manufacturing plants.

Companies

Austro International Investment Corp. SA, Geneva, acquired 3.9 million shares of Samaraneftegas (Samara), one of Russias main oil producing companies. Samaras 1994 oil production is estimated at 175,000 b/d, with reserves pegged at 2 billion bbl. Most of its production is in the Samara region, 1,000 km southeast of Moscow.

Tosco Corp., Stamford, Conn., consolidated its two West Coast operations, Tosco Refining Co. and Tosco Northwest Co., forming Tosco Refining & Marketing Co. Tosco R&M assets include Toscos San Francisco Bay and Puget Sound refineries, West Coast distribution facilities, and a retail marketing system of about 1,000 service stations. The new division is based in Seattle.

CMS Energy Corp.s oil and gas exploration and production unit, CMS Nomeco Oil & Gas Co., completed the purchase of Terra Energy Ltd., Traverse City, Mich., for $63.6 million. Terras reserves lie mainly in Devonian Antrim shale gas leases in northern Michigan, where it holds interests in about 92 producing project areas including more than 1,500 wells. Terras net gas reserves exceed 81 bcf, and net production is 10 MMcfd. Acquisition of Terra will boost CMS Nomecos net Antrim shale gas production to about 42 MMcfd from more than 2,000 wells.

Finlands Neste Oy gathered all its gas operations into one division, to be called Neste Energy. It will integrate natural gas transporter Gasum Oy, local gas distributors Helsinkikaasu Oy and Kothan Kaasuenergia Oy, domestic liquefied petroleum gas marketer Tehokaasu Oy, global LPG trader LPG International, heating company Neste Lampo, and Neste Advanced Power Systems.

Dominion Energy Inc., a unit of Dominion Resources Inc., Richmond, Va., paid $11 million for the stock of Chesterfield Energy Corp., Gas Exploration & Development Co., and Stonewall Gas Co., all based in the Clarksburg, W.Va., area and consolidated the acquired assets to form Dominion Appalachian Development Inc. (DAD), Clarksburg. DAD began operating last week with assets of more than $75 million, reserves of 50 bcf of gas, and 900 wells in Pennsylvania, Virginia, and West Virginia producing 15 MMcfd of gas. The deal doubled Dominion Energys Appalachian holdings.

Cogeneration

Destec Energy Inc., Houston, agreed to sell as much as 230,000 kw of power from its Channelview, Tex., cogeneration plant to the Lower Colorado River Authority under a long term agreement starting in June 1996. The plant generates 590,000 kw of power and more than 1 million lb/hr of steam. Site is near ARCO Chemical Co.s Channelview complex in the Houston area.

Union Carbide Corp. let contract to Fluor Daniel to provide engineering, procurement, construction, and start-up services for a 220,000 kw combined-cycle cogeneration plant at its Taft, La., chemical plant. The plant is scheduled for completion in mid-1997.

Drilling-production

Citation Oil & Gas Corp., Houston, completed the purchase of certain Rocky Mountain leases from Apache Corp. for $155 million. Assets include Apaches interests in 138 fields with about 1,600 active wells in Colorado, Montana, North and South Dakota, Utah, and Wyoming (OGJ, July 31, p. 42). Apache will keep its interests in Colorados Green River basin and Wyoming and in the San Juan basin of Colorado and New Mexico.

Norways Den norske stats oljeselskap AS signed a 5 year, $450 million agreement with Kongsberg Offshore AS, a unit of FMC Corp., Houston, for purchase of subsea production systems. The systems will feature Kongsbergs hinge-over subsea template (HOST) technology, developed jointly with Statoil. They will be used mainly for development of Asgard, South Gullfaks, Rimfaks, and East Yme Beta fields in the Norwegian North Sea, projects requiring 80-90 subsea wells. Development is expected in 1995-97.

Bateman Americas, Lakewood, Colo., and Bateman Engineering Ltd., Kiryat Bialik, Israel, completed financing to start a $100 million contract to design and supply a gas compressor station and treatment plant for the Tomsk region of western Siberia. It will be one of the first compressor stations in the region, Bateman said, and will permit operator Tomskneft Production Association to market its gas.

ARCO China Inc. plugged as a dry hole its 35-1-2 Yacheng well in the South China Sea. The well is the first appraisal of the 35-1-1 Yacheng gas discovery, which was drilled in 1994 and suspended without testing due to mechanical problems. ARCO is conducting a multiwell exploration and appraisal program on three blocks near Yacheng 13 gas field, scheduled to begin production early in 1996. The next wildcat will be drilled on a block northeast of Yacheng 13 field while the results of the 35-1-2 Yacheng are being evaluated.

Enron Oil & Gas Co. and Chieftain International (U.S.) Inc. closed the 50-50 purchase of Santa Fe Minerals Inc. interests in the Gulf of Mexico effective last Jan. 1. The deal includes a package of 57 developed and undeveloped blocks covering 291,000 gross acres (147,000 net to Enron-Chieftain) in the Matagorda Island and High Island areas off Texas, Garden Banks and West Cameron areas off Louisiana, and Viosca Knoll-Mobile Bay areas of the eastern gulf. Average net production from the leases for the 6 months ended June 30, 1995, is 63.5 MMcfd of gas and 223 b/d of condensate.

Apache Corp.s C-3 appraisal well on Bohai Bays Zhao Dong block off China flowed about 4,000 b/d of oil and 460 Mcfd of gas during preliminary tests of four Pliocene Minghuazhen intervals at 3,714-4,659 ft. Apache also tested Oligocene Shahejie at 6,432-50 ft, which flowed 1,350 b/d of oil for a brief time before water encroached. Operator Apache holds a 50% working interest in the well, XCL Ltd., Lafayette, La., 50%.

Coastal Oil & Gas Corp., Houston, plans to acquire through an affiliate the interests of Tesoro Petroleum Corp., San Antonio, in four units of Bob West field in South Texas for about $74 million. The deal includes Tesoros aproximate 70% working interests covering 1,761 acres. Production from the interests is about 50 MMcfd of gas from 14 wells. The deal will give Coastal units 100% working interest in the areas involved.

Norcen Energy Resources Ltd., Calgary, agreed to the sale of its phase one Canadian oil and gas leases. Proceeds, combined with other lease sales this year in Canada and the U.S., will be more than $240 million (Canadian) and will be received by the end of November. Reserves are estimated at 258 bcf of gas and 20 million bbl of oil and natural gas liquids, with production of 95 MMcfd and 7,500 b/d. A phase two sale of leases in the Athabasca and Joarcam area is to start this month, and sale of leases in Australia, New Zealand, and Indonesia is under way. Proceeds for these areas of about $100 million is expected.

British Gas plc let an 11 million ($16.5 million) contract to Brown & Root McDermott Fabricators Ltd., Inverness, Scotland, to fabricate a jacket for development of Armada field in U.K. North Sea. Work on the 6,000 metric ton jacket will begin in October, with completion set for February 1997.

BP Exploration Operating Co. Ltd. resumed production for a second test period in Machar oil field in the U.K. North Sea. Machar is part of the Eastern Trough Area Project (ETAP), a planned two platform development of nine medium size and small fields (OGJ, June 26, p. 20). The current test is expected to last 1 year to assess reservoir performance with water injection. The Sedco 707 semisubmersible rig is conducting the test, producing oil directly into the Stena Savonita shuttle tanker.

Phillips Petroleum Co. Norway let contract to Aker AS, Oslo, to build a jacket, piles, and utilities module for the 2/4J process and transport platform to be used in redevelopment of giant Ekofisk oil and gas field in the Norwegian North Sea. The jacket will be 108 m high and weigh 11,000 metric tons, with 5,000 metric tons of piles. Delivery is due in April 1997. The 4,300 metric ton utilities module is marked for delivery in July 1997.

Petrochemicals

Mobil Corp. settled a lawsuit it filed in 1983 against Amoco Chemical Co. alleging infringement of Mobil patents related to production of paraxylene. The cash settlement of $114 million will benefit Mobils third quarter 1995 net income by an estimated $70 million after tax.

Exploration

Chevron U.S.A. Inc. and Davis Bros. Oil Producers Inc., Tulsa, agreed to conduct a $5 million seismic survey on Osage Indian lands in Osage County, Okla. Chevron agreed to a $1 million advance payment for a seismic option on as much as 414,720 net acres. The contract is through Dec. 15, when Osage leasing will continue on land not selected by Chevron. Davis reached a seismic option agreement earlier this year, then Chevron assumed responsibility for the agreement. There are no drilling commitments in the option.

Refining

TransAmerican Refining Corp., Norco, La., let contract to Raytheon Engineers & Constructors/Litwin to provide detailed design engineering for a 100,000 b/d Bar-Co millisecond catalytic cracking unit under license from UOP. TransAmericans 200,000 b/d Norco refinery is designed to process heavy crude.

Tunisia plans to start work next June on a 120,000 b/d refinery at Skhira, about 300 km south of Tunis. About 80% of the refinerys production is to be exported. OPEC News Agency reported investment in the first phase is to reach $600 million, increasing to $1 billion in the second phase. Tunisia refines 30,000 b/d of oil at its Bizerte refinery, 100 km north of Tunis.

Pipelines

MCN Corp., Detroit, agreed with Blue Dolphin Energy Co., Houston, to buy an interest in an oil, gas, and condensate gathering system in the Gulf of Mexico for $10 million. MCN unit CoEnergy Offshore Pipeline & Processing Co. will acquire a one-third interest in a pipeline 40 miles off Freeport, Tex., a separation facility, and a barge terminal. Blue Dolphin holds the remaining interest and will continue to operate and maintain the pipeline. MCN said the gathering system has access to estimated reserves of 250 bcf of gas and 15 million bbl of oil.

Utilities

General Public Utilities Corp. (GPU) and New Jersey Resources Corp. (NJR) formed a pooling plan to manage gas supply and capacity portfolios for as many as 25 gas fired power generating stations. The stations supply the GPU system in New Jersey and Pennsylvania. NJR will provide gas purchase and fuel management services with GPU power dispatchers. The pooling plan potentially will supply 1.1 million kw of power under contract with the GPU companies, as well as the companies gas fired plants in New Jersey and Pennsylvania.

UtiliCorp United, Kansas City, Mo., is participating in a test program that will enable residential customers in Rocky Valley, Iowa, to choose their gas supplier from either their local utility or one of three competitors. Rock Valley residents can choose from local utility Midwest Gas, Equitable Resources, Minnegasco, and UtiliCorps Peoples Natural Gas unit.

Gas marketing

Chevron U.S.A. Production Co.s natural gas business unit and Wicor Gas Marketing, a unit of Wicor Inc., Milwaukee, formed a venture to market natural gas in Wisconsin. Wicor said the alliance is the first of its kind between a major energy producer and a Wisconsin utility. Wicor Gas Marketing at first will focus on serving Wisconsins industrial customers. Plans are to expand to other large energy users and eventually to residential customers as gas markets continue to open.

Valero Natural Gas Co., a unit of Valero Energy Corp., San Antonio, opened a gas marketing and supply office in Calgary to provide the company increased access to Canadian gas.

Associated Natural Gas Corp., a unit of Panhandle Eastern Corp., agreed to buy Continental Energy Marketing Ltd., Calgary, for an undisclosed sum. Combined with Associated Gas Services Calgary office, the company will market about 750 MMcfd of gas. The deal expands Associateds Canadian marketing presence into Ontario and Quebec. Business will be conducted under Associated Energy Marketing, a division of Associated Energy Services Ltd. Continentals management team and most of its employees will remain with the combined organization.