Gas marketing
El Paso Natural Gas Co. bought all outstanding stock of Premier Gas Co., Tulsa, a natural gas marketer with industrial and commercial sales in the U.S. Midcontinent and long term sales to utilities in the Great Lakes region. Premier, which in 1995 sold about 159 bcf of gas to 125 customers, is to continue operating independently as a unit of Eastex Energy Inc. El Pasos merchant services group, now including Eastex, Premier, El Paso Gas Marketing and Heath Petra Resources, has consolidated sales totaling more than 2 bcfd.
Companies
Alberta Energy Co. Ltd. (AEC) began a $1.1 billion (Canadian) takeover bid for Conwest Exploration Co., offering Conwest shareholders $28 cash or 1.25 AEC shares for each share of Conwest stock. The offer expires Jan. 10, 1996. The combined companies would have $2.3 billion market capitalization, production of 25,500 b/d of oil and 530 MMcfd of gas, and reserves of 85.5 million bbl of oil and 2.8 tcf of gas. Both are Calgary firms.
Forest Oil Corp., Denver, agreed to acquire Atcor Resources Ltd., Calgary, for $186 million (Canadian). Closing is contingent upon Forest completing a common stock offering. The acquisition is expected to close late in January 1996. Atcor has properties in Alberta and British Columbia, interests in Canadian frontier lands, and gas processing and marketing operations.
M-I Drilling Fluids LLC, Houston, agreed to acquire Anchor Drilling Fluids AS from Transocean AS, Tananger, Norway, for $109.5 million.
Pipelines
TransCanada PipeLines Ltd., Calgary, let a contract worth more than $70 million for pipelaying at various sites in Ontario and Manitoba to O.J. Pipelines Corp. (OJP), a unit of Ocelot Energy Inc., Calgary. OJP is to lay 81.6 km of 42 in. and 1.1 km of 48 in. pipe, plus hydrostatically test eight valve sections. The project is to begin in mid-December with completion expected Mar. 31, 1996.
Tejon Ranch, north of Los Angeles, withdrew its opposition to construction of the proposed 130,000 b/d Pacific Pipeline System (PPS) crude oil pipeline from Kern County, Calif., to Los Angeles, on right-of-way issues that will allow the 132 mile line to cross part of the ranch. Tejon had raised concerns about financial responsibility for cleaning up oil spills from the line. Tejon and PPS settled the dispute in part by working for passage of a state bill clarifying oil pipeline financial liability (OGJ, Oct. 23, p. 44). PPS partners are units of Chevron Corp., Texaco Inc., Unocal Corp., and Anschutz Corp.
Oilsands
Alberta Energy Ministrys energy and utilities board issued its first approval for a grassroots oilsands plant under the provinces new environmental laws and permitting regulations to the $100 million Bitumount oilsands project proposed in northern Albertas Athabasca region by Solv-Ex Corp., Albuquerque. Solv-Ex and United Tri-Star Resources Ltd., Calgary, a 10% partner in the project, have completed preliminary engineering on the 14,000 b/d Bitumount plant and have prepared a site to allow construction to start this winter. Production is to begin in late 1996 or early 1997.
Drilling-production
Louisiana Land & Exploration Co. (LL&E), New Orleans, is producing 21.4 MMcfd of gas and 800 b/d of condensate from six wells in Bastian Bay field, Plaquemines Parish, La. The field is one of the first where LL&E has reached the drilling stage in its 3D seismic based South Louisiana development program, in which the company has 21 3D seismic programs in various stages of progress. Eleven of 12 wells drilled in 1995 based on 3D data have been successful. LL&E estimates Bastian Bay finding and development costs at 20/Mcf of gas equivalent.
A Chinese investment bank joint venture is reportedly seeking $750 million in foreign capital to fund further development of Jilin oil field in Chinas northeastern Jilin province. China International Capital Corp., in which U.S. banker Morgan Stanley has a 35% stake, was appointed sole financial advisor to state company Jilin Oil & Gas Development, which plans to hike Jilin oil output the next 5 years to 40,000 b/d. Jilins oil reserves are estimated at 1.3 billion bbl.
Marathon Oil Co. and partners drilled a second successful step-out to Green Canyon Block 244 field in 2,700 ft of water about 255 miles south of New Orleans. The 1 Green Canyon Block 245 well cut 120 ft of pay in two intervals of an adjacent fault block and has been suspended. Partners earlier this year delineated the field with the 1 Green Canyon Block 200 appraisal well and now estimate the main reservoirs reserves at 200 million bbl of oil equivalent. Marathon, BP Exploration Inc., and Shell Offshore Inc. each have a one third interest in the Green Canyon 244 unit.
Flextrend Development Co. LLC (FDC), Houston, a unit of Leviathan Gas Pipeline Partners LP, is producing 30 MMcfd of gas from a well on Viosca Knoll Block 817 off Louisiana. The A-1 VK 817 well is producing from more than 100 ft of vertical pay in a reservoir at 4,800 ft measured depth. Operator FDC owns 75% interest in the project subject to an agreement with Houstons Tatham Offshore Inc. 25%.
KCS Energy Inc., Houston, paid a combined $31 million in two related deals for oil and gas reserves in Michigans Niagaran reef trend. KCS acquired 13.7 bcf of gas and 1.1 million bbl of oil from Hawkins Oil of Michigan Inc., Tulsa, in the form of production payments, mostly from 89 Niagaran reef trend wells. KCS also bought escalating working interests in 30 of the 89 wells that are expected to add another 3.4 bcf and 225,000 bbl of reserves by early 1997.
Plains Resources Inc., Houston, agreed to pay $46 million for all of Marathons producing and nonproducing oil and gas properties in the Illinois basin, including three Marathon operated fields producing about 4,500 b/d of oil, various nonoperated producing properties, and all other oil and gas mineral interests and surface fee and undeveloped leaseholds. Plains also is to acquire Marathons geological, geophysical, and engineering database for the region. The deal is to close before yearend and be effective Nov. 1, 1995.
Whiting Petroleum Corp., Denver, agreed to buy an 18% interest in Conroe field unit, Montgomery County, Tex., from Wainoco Oil Corp., Houston, for $19.5 million. The deal is expected to close by yearend, with an effective date of Oct. 1, 1995.
Elf Enterprise Caledonia Ltd. and Kerr-McGee Oil (U.K.) plc let oil field service contracts to Expro North Sea Ltd. worth more than $6 million. Elf awarded Expro a 3 year contract with a 2 year option to renew for management, maintenance, and personnel for wire line and swab line operations on North Sea Claymore A, Saltire A, and Piper B platforms, and any drilling rigs chartered by Elf Enterprise off the U.K. Kerr-McGee hired Expro to provide well testing and wire line and downhole data acquisition for all its U.K. operations.
LNG
Repsol International Finance BV, Spain, acquired a 20% interest in Trinidad & Tobagos Atlantic LNG export project after other shareholders agreed to adjust their shares. With Repsols participation in the project, other shareholders and their interests are Amoco Trinidad LNG Co. 34%, British Gas Trinidad LNG Ltd. 26%, and Cabot Trinidad LNG Corp. and National Gas Co. of Trinidad & Tobago LNG Ltd. 10% each. Atlantic LNG partners expect to let a construction contract in first quarter 1996 for a 3 million metric ton/year LNG plant in Trinidad that would start up early in 1999.
Exploration
United Meridian Corp., Houston, and partners drilled their eighth consecutive successful well on Block CI-11 off Cote dIvoire. The B-3 wildcat flowed 5,970 b/d of oil and 4.6 MMcfd of gas through a 5664 in. choke with 950 psi flowing tubing pressure from 63 ft of net gas pay and 169 ft of net oil pay in a new fault block above 10,419 ft TD. B-3 also confirmed the presence of Senonian gas sands 4,000 ft southeast of the B-1 Lion discovery well. With six Lion oil wells and two gas wells in Panthere field on line, UMC by yearend expects to be producing 20,000 b/d of oil and 24 MMcfd of gas off Cote dIvoire.
Santos Ltd. reported the highest drill stem test flow in Australias Cooper basin with a gas discovery on East Patchawarra block about 12.5 km south of Cuttapirrie field and 118 km north of Moomba gas plant. The 1 Pennie wildcat flowed 18.9 MMcfd through a 34 in. surface choke from Permian Epsilon sands at 2,849-868 m. Operator Santos holds 83.7011% interest in the well, Boral Energy Resources Ltd. 12.7159%, and Crusader 3.5830%.
Coastal Oil & Gas Corp. E-1 Coates wildcat in Northeast Jeffress field, Hildalgo County, Tex., flowed 21.4 MMcfd of gas and 141 b/d of condensate with 7,950 flowing casing pressure from perforations in Oligocene lower Vicksburg at 13,830-14,204 ft. Operator Coastal holds 86.25% interest, Greenbrier 74 Ltd. 12.4%, IBC Petroleum Inc. 1.25%, and Fairfield Energy Co. 1%. Coastal, which holds interests in about 1,200 acres near the discovery, spudded F-1 Coates well, the first of several planned offsets.
Forest Oil Corp. found gas based on 3D seismic data in 286 ft of water on West Cameron Block 615 in the Gulf of Mexico off Louisiana. The discovery well, drilled to 7,146 TDcut 333 ft of net pay, and a confirmation sidetrack 472 ft of vertical net pay. Forest and Santa Fe Energy Resources Inc., Houston, each own 25% interest in the block. Forest plans 3D surveys of West Cameron Blocks 616 and 617 in first half 1996, in which it acquired 50% interests after the Block 615 discovery.
Refining
A refinery worker died in a fire early Dec. 11 at the 143,350 b/cd Lemont, Ill., refinery of Uno-Ven Co., Arlington Heights, Ill. Officials said the incident began with a small fire at a sponge coker unit process heater as workers were preparing the heater for routine maintenance. Uno-Ven late Dec. 12 began bringing the coker back on line and Dec. 13 was restoring full crude charge to distillation units. Uno-Ven is owned 50-50 by Unocal Corp. and Petroleos de Venezuela SA.
Lagoven SA let a contract worth more than $200 million to Technofluor, a company jointly owned by Fluor Corp. and Venezuelas Grupo Tecno SA, to revamp a desulfurization complex at its 630,000 b/d Amuay refinery. Completion of the project is expected in mid-1997.
U.S. Export-Import Bank and a group of other lenders agreed to provide a $96 million guaranteed loan to Lukoil-Permnefteorgsyntez to modernize its 280,000 b/d refinery at Perm, Russia. Units of ABB Inc., Norwalk, Conn., helped arrange the financing and will play key roles in implementing the program supported by the loan. After the revamp, the refinery will be capable of producing more than 20,000 b/d of low aromatics diesel fuel, while increasing yield to 87% from 71% and cutting sulfur dioxide emissions 30%.
Mobil Oil Corp. commissioned a mercaptan treating unit at its 180,000 b/cd Joliet, Ill., refinery to cut the volume of caustic soda effluents produced at the plant. The new unit uses UOPs caustic free sweetening process, which converts mercaptan sulfur compounds in gasoline to disulfide compounds.
American Western Refining LP (AWR), a new unit of Gadgil Western Corp., closed the purchase of certain assets of the idle 86,000 b/d Indian refinery at Lawrenceville, Ill., from Castle Energy Corp. unit Indian Refining I LP (Irilp), including property, plant, equipment, and a related terminal. AWR paid Irilp $3 million cash and issued a $5 million note to the company due on the earlier of Oct. 31, 1996, or the date AWR obtains financing to restart the refinery. AWR also assumed certain liabilities in the deal, including environmental liabilities and certain contractual obligations to Shell Canada Ltd.
Total Petroleum North America plans to reduce its refining capacity either by selling its 56,000 b/d Arkansas City, Kan., refinery or by converting the plant next year to a blending and storage facility. The move is part of Total North Americas plan to rationalize operations and limit exposure to margin fluctuations on crude and products markets.
Konsorcjum Poludnie SC let contract to Fluor Corp. for a feasibility study of a grassroots refinery and petrochemical complex in southern Poland. The study is to be funded partly by a U.S. Trade & Development Agency grant. Konsorcjum Poludnie is a group of 32 Polish companies involved in production, refining, petrochemicals, and refined products marketing.
TransCanada PipeLines is negotiating purchase of 50% interest in the Coffeyville, Kan., refinery of Farmland Industries Inc., Kansas City., Mo. That will support Farmlands plans to expand refinery capacity to 125,000 b/d from 75,000 b/d. The deal is expected to close in March 1996.
Petrochemicals
Dow Chemical Canada Inc. plans to expand its Fort Saskatchewan, Alta., ethylene plant to 1.79-1.98 billion lb/year from 1.19 billion lb/year at a cost of $150-200 million. Subject to final engineering and design studies and regulatory approvals, the project would begin in July 1996 with completion slated by October 1998. Dow is designing the plant for possible later expansion to 2.28 billion lbp NEWS
CF Industries Inc., Long Grove, Ill., let a $20.7 million contract to Uhde GmbH, Dortmund, Germany, for basic and detail engineering services on a revamp of its Donaldsonville, La., fertilizer complex. The project will include a 2,200 ton/day urea plant with a single train, fluidized bed granulation unit that would be the largest in the U.S. Uhde also is to provide engineering services on a 960 ton/day nitric acid plant and a 2,700 ton/day UAN solution plant for the Donaldsonville complex.
Copyright 1995 Oil & Gas Journal. All Rights Reserved.