INDUSTRY BRIEFS

Refining

Formosa Plastics Group,

Taipei, will begin building its 300,000 b/d Taiwan refinery by yearend. The plant will feed Taiwan's sixth naphtha cracker complex, currently under construction, and is to be complete in 4 years.

China's

state owned Sinopec entered into a strategic alliance making Honeywell Inc. a preferred refinery control systems supplier. The deal will yield $75 million in additional Honeywell sales to Sinopec's 38 refinery/petrochemical complexes the next 5 years, more than double what Honeywell expected otherwise.

AOOT Orknefteorgsyntez,

a private refiner in Russia's Orenburg region, let contract to Mannesmann KTI GmbH, Dusseldorf, for engineering, procurement, and construction supervision of a 20,000 b/d naphtha hydrotreater and CCR reformer at its 150,000 b/d Orenburg refinery. UOP will provide a licensing and basic engineering package under a separate contract. The total project is worth about $100 million. Work began Aug. 2, and mechanical completion is slated for 1998.

Companies

Occidental Petroleum Corp.

will pay $275 million to resolve allegations that it failed to comply with the U.S. Department of Energy's petroleum price and allocation regulations from Oct. 1, 1979, through Jan. 27, 1981 (OGJ, July 3, p. 24). It will pay $100 million within 30 days and $35 million/year plus interest the next 5 years. In agreeing to the settlement, Oxy did not admit any wrongdoing.

ARCO

made a cash offer for all stock of Irish independent Aran Energy plc for about $248 million. Aran owns production in the U.K. North Sea, off Ireland, and onshore and off the U.S. Gulf Coast as well as interests in a possible discovery in the U.K. West of Shetlands area. Proved reserves at yearend 1994 were 42 million bbl of oil equivalent.

KN Energy Inc.,

Lakewood, Colo., agreed to acquire gas gathering and processing assets in the Texas panhandle from Parker & Parsley Petroleum Co., Midland, Tex. Included is a 32 MMcfd cryogenic natural gas liquids processing plant and about 900 miles of gathering pipeline.

Ranchmen's Resources Ltd.'s

board recommended shareholders reject a $265 million (Canadian) takeover bid by Crestar Energy Inc. as inadequate (OGJ, Aug. 7, p. 26). Both are Calgary companies.

Caltex SA

and partners started Afric Oil, South Africa's first black owned oil company. Afric will at first focus on wholesale marketing of refined products in South Africa and neighboring countries but later will diversify into refining. Black owned investment company Worldwide African Investment Holdings holds a 51% interest in the venture. Caltex will transfer 100 service stations in the Gauteng area to Afric.

Lehman Bros Inc.

contacted more than 130 companies in and outside the U.S. to determine their interest in a possible merger/acquisition, property sale, or equity contribution involving MESA Inc., Irving, Tex. It is part of MESA's efforts to bolster shareholder value (OGJ, July 17, p. 30).

MunaiGaz,

Kazakhstan's state oil company, let a $6.4 million contract to Geoquest, Houston, to set up three geoscience computing centers at its headquarters in Almaty and at its two main producing units, EmbaNeft in Atyrau and MangystauMunaiGaz in Aktau in western Kazakhstan. GeoQuest also will install exploration and production data management systems at all MunaiGaz producing units and at the Kazakh ministry of oil and gas.

Exxon Exploration Co.

and Shell Exploration BV agreed to jointly pursue exploration, development, and production opportunities offshore and onshore in Venezuela. Under terms of the deal, each will have the option to participate jointly or singly in any acquisition under Venezuela's current profit sharing exploration bid round.

Gas storage

Market Hub Partners LP

(MHP), Leesburg, Va., agreed to provide Aquila Energy Marketing Corp. gas storage services starting Sept. 1, when MHP begins operating the 3.5 bcf first phase facilities of the Egan salt dome storage project near Evangeline, La. The contract calls for Aquila to acquire substantial working capacity in the storage cavern with rights to inject or withdraw the full volume within 10 days and allows Aquila access to all pipelines to be connected to the facility. Tejas Power Corp., an MHP limited partner, acted as MHP's sales agent in the deal.

J. Makowski Co.,

Boston, and partners in the Avoca natural gas storage project received the last two permits needed to begin construction of the 5 bcf salt cavern at Avoca, N.Y., closing a 212 year regulatory review. A 4 year construction program was to begin last week to place in service the first 2 bcf of working gas capacity by October 1997 (OGJ, Sept. 26, 1994, p. 46).

Pacific Gas Transmission Co.

(PGT), a unit of Pacific Gas & Electric Co., San Francisco, and HNG Storage Co., Houston, formed a venture to develop gas storage projects in western North America, citing a need for peak shaving capacity to support growing gas demand. The venture combines PGT's large market presence in the western U.S. with HNG's gas storage expertise.

Drilling-production

Russia's Lukoil

will spend about $300 million in a venture with Kazakh state company Yuzhneftegaz to develop Kumkol oil field in Kazakhstan. Yuzhneftegaz will contribute development rights to the field, geological data, and an existing pipeline. The venture also plans to invest in the Chimkent refinery in Southeast Kazakhstan, where Kumkol oil will be refined.

Coparex International,

Paris, bought the French petroleum assets of Triton Energy Corp., Dallas, for about $16 million. Mainly involved is Triton's 50% interest in Villeperdue oil field in the Paris basin.

Pertamina

and partners were ready to spud the fifth well on Java's Tuban block after the 4 Mudi delineation well flowed a combined 2,600 b/d of oil through a 34 in. choke from zones at 8,830-930 ft and 9,124-314 ft in Tuban limestone. Tuban block partners also are preparing a field development plan and expect within 45 days to begin a 360 km seismic survey of the acreage.

Coastal Oil & Gas Corp.

and partners plan to install a platform in 259 ft of water on Main Pass Block 223 in the Gulf of Mexico capable of producing 100 MMcfd of gas. A decision to develop came after a well on Main Pass Block 222 confirmed middle Miocene gas pays at 8,600 and 8,800 ft. The field's discovery well found pay zones at 8,800 and 9,500 ft on Block 223.

Enserch Exploration Inc., Dallas,

let a firm 3 year contract to Reading & Bates Corp., Houston, to use R&B's M.G. Hulme Jr. semisubmersible rig for Green Canyon Block 254 field development drilling and other projects in as much as 1,000 m of water in the Gulf of Mexico. Work is to begin when an upgrade of the unit from its current 850 m water depth capacity to 1,000 m is complete about Apr. 1, 1996. Green Canyon 254 development drilling is to get under way in second quarter 1996.

Angolan state company

Sonangol and Global Marine Drilling Co., Houston, combined certain equipment, personnel, and facilities to form Angolan Drilling Services Co. The new company will provide Angolans training and experience needed to manage Sonangol's offshore drilling operations. Global Marine assigned the Glomar High Island V jack up to the venture.

Vastar Resources Inc.,

Houston, agreed to buy San Juan basin producing leases from a Destec Energy Inc. unit for $35 million. The leases are in Ignacio Blanco Fruitland field next to Vastar's production in southern Colorado. Net reserves are estimated at 50 bcf with current production averaging 12 MMcfd. Sale of production from the wells will qualify for Section 29 federal income tax credits through 2002. Separately, Vastar hiked outlays for development drilling in the Gulf of Mexico by $23 million to take advantage of recently identified opportunities, thus boosting its total 1995 capital budget to $440 million.

Profco Resources Ltd.,

Calgary, spudded the second of three planned wells 9 miles off Nigeria. The 8,500 ft test follows an initial well in January that flowed more than 6,000 b/d of oil. Profco is in a partnership with Nigeria's Atlas Petroleum International Ltd. to drill three wells. A third well will start in November if justified by results of the second well.

U.S. Minerals Management Service

scheduled the first meeting of its royalty policy advisory committee Sept. 12-13 in Denver (OGJ, Aug. 14, Newsletter). The meeting will focus on improving and streamlining reporting of production and royalties on federal and Indian leases.

Petrochemicals

Exxon Chemical Co.

plans to expand polypropylene (PP) capacity at its Baytown, Tex., petrochemical complex by 240,000 metric tons/year to 720,000 metric tons/year. The expansion will include added capacity for homopolymer and impact copolymer PP. Engineering is under way, and production is to begin in mid-1997. Process technology for the new line is a mix of Technipol's Spheripol, Mitsui's Hypol, and Exxon technologies. M.W. Kellogg is general engineering and construction contractor.

Bahrain's

Gulf Petrochemical Industries Co. let a $136 million contract to Mitsubishi Heavy Industries Co. for construction of a 1,700 metric ton/day urea plant at Manama, Bahrain.

Exploration

Triumph Resources Corp.,

a unit of New York City's Triumph Oil & Gas Corp., acquired a Michigan basin leasehold totaling about 25,500 acres in Lake Erie off Kent and Essex counties, Ont. Triumph plans to drill extended reach wells from shore because of a ban on drilling in Lake Erie. A seismic survey is to get under way in September. Target is Ordovician Trenton potential on trend with onshore oil fields nearby.

Canadian 88 Energy Ltd.,

Calgary, drilled a sour gas discovery at Crossfield, Alta., near Calgary. The well, drilled to 8,200 ft, has estimated reserves of more than 15 bcf. It is the company's third discovery in the area. Canadian 88 plans to spend as much as $25 million (Canadian) the next 18 months to drill about 20 nearby wells.

U.S. MMS

issued a final notice for a western Gulf of Mexico lease sale Sept. 13 in New Orleans. Sale 155 will offer 5,181 blocks covering 28.5 million acres. It will be the 35th lease sale in the western gulf.

Pipelines

El Paso Natural Gas Co.

(EPNG) by yearend expects to complete a 300 MMcfd expansion of receipt capacity in its San Juan basin gas transportation and gathering system in Northwest New Mexico. Work is to begin on the $26 million San Juan Triangle expansion project in October, following EPNG's compliance with environmental requirements. EPNG plans to add 30 miles of 34 in. line and replace a compressor at its Gallup, N.M., compressor station.

Members

of the Gas Industry Standards Board (GISB), Houston, ratified the board's first set of electronic standards, dealing with release of pipeline capacity. GISB members are preparing ballots on electronic standards for nominations, confirmations, and scheduled volumes (OGJ, July 17, p. 31).

LNG

Chevron Corp.

made a limited sale of liquefied natural gas to Turkey's state owned gas company Botas. Chevron Oil Trading made the spot sale for Chevron's share of as many as five LNG cargoes to be delivered the next 8 months to the new Botas LNG receiving terminal at Marmara Ereglisi. The LNG is produced from Australia's Northwest Shelf LNG export project, in which a Chevron unit holds interests with five other companies, each of which sold its share of the LNG cargoes destined for Turkey. The cargoes, the first spot sales of LNG into Turkey, are valued at more than $40 million.

Tankers

U.S. Coast Guard

proposed a rule setting minimum standards for tank level or pressure monitoring devices to be used on tank vessels. The devices are designed to alert operators of accidental discharges and reduce the size and effects of oil spills.

Cogeneration

CMS Energy Corp. unit

CMS Generation Co. and Argentine group Empresa de Energia & Vapor agreed to supply YPF SA, Buenos Aires, electricity and steam from a gas fired, combined cycle cogeneration plant to be built at YPF's La Plata refinery in Buenos Aires province. The 150,000 kw capacity plant will supply 73,000 kw of power to YPF's refineries at La Plata and Lujan de Cuyo in Mendoza province, as well as 200 tons/hr of process steam to the La Plata refinery under a long term contract. The remaining power will be sold to Argentina's power grid. Financing for the project is to be complete in early 1996, with a 2 year construction phase to begin soon after.

Utilities

American Gas Association

reported U.S. gas utilities added nearly 1.1 million natural gas heating customers in 1994. It said 204,966 households switched to natural gas from other fuels, and 868,000 new homes were built with gas heating installed.