INDUSTRY BRIEFS

LNG

INDONESIA'S PERTAMINA secured $969.5 million in loans from a group of Japanese, French, and U.S. banks to build a seventh train at its Bontang liquefied natural gas complex in East Kalimantan. Pertamina recently let a $550 million contract to Chiyoda Corp. and Mitsubishi Corp. to build the 2.6 million metric ton/year train, slated for completion in late 1997 (OGJ, April 10, p. 43).

IMPORTS-EXPORTS

LITHUANIA agreed to import Venezuelan Orimulsion boiler fuel, an emulsion of extra heavy Orinoco crude, water, and a surfactant, under a 15 year contract. Venezuela's Bitor SA will supply 300,000 metric tons/year of Orimulsion the first 3 years for $23/ton subject to a later increase to 500,000 tons/year for the regular market price of $90/ton during 1998-2012. The first cargo is to be delivered by mid-August to the Elektrenai heat and power plant near Vilnius, with combustion tests using 25,000 tons to be complete in September. The deal will back out one third of Lithuania's imports of Russian fuel oil.

PETROCHEMICALS

SHELL ESPANA SA completed the sale of its Industrias Quimicas Asociadas SA (IQA) chemical unit to a Spanish group led by La Seda de Barcelona SA. IQA is based in Tarragona, Spain, where it has capacity to produce 90,000 metric tons/year of ethylene oxide, 70,000 tons/ year of monoethylene glycol, and 25,000 tons/year of polyether polyols. Shell will continue to sell and provide technical support for IQA's products.

DOW CHEMICAL CO. and Asahi Chemical Industry Co., Hong Kong, plan a venture to produce polystyrene in China. They expect to begin production by 2000. Asahi is the biggest Asian polystyrene producer, while Dow is the world's largest polystyrene producer.

MITSUI TOATSU CHEMICALS INC. and Mitsui & Co. secured permission from Viet Nam to build a world scale polyvinyl chloride plant there. Plans call for construction to begin early next year for an 80,000 metric ton/year capacity PVC plant on the outskirts of Ho Chi Minh City, with commercial start-up set for late 1997. The venture is to be capitalized at $30 million, of which 70% will come from the Mitsui companies and the rest from local companies and Mitsui's Thai joint venture Thai Plastic & Chemicals Co.

ARABIAN CHEMICAL CO. (LATEX) LTD., a venture of Dow Chemical CD. and E.A. Juffali & Bros., started commercial production of styrene butadiene latex at Jubail, Saudi Arabia. Dow said the plant is the only one of its type in the Middle East and will supply the construction materials and carpet manufacturing sectors.

GAS PROCESSING

ANG GATHERING & PROCESSING LTD., a unit of Alberta Natural Gas Co. Ltd., Calgary, acquired majority interests in two gas processing plants and associated gathering systems near Grande Prairie, Alta., for $20 million (Canadian) from a partnership managed by International Colin Energy Corp., also of Calgary. ANG will receive a 56% interest in the 45 MMcfd Cutbank sweet gas plant and an 87.5% interest in the 15 MMcfd Gordondale sour/sweet gas plant. ANG will spend $5 million to double Gordondale capacity.

EXPLORATION

TOTAL signed a production sharing contract (PSC) covering the 26,000 sq km Block 4 in East Central Oman near Saih Rawl and Bank gas fields. Total will spend at least $60 million during 7 years under the PSC. It plans a seismic survey followed by one or two wildcats targeting gas at about 5,000 m.

OCCIDENTAL PETROLEUM CORP. received a 26,000 sq km exploration permit in the lightly explored Great South basin off New Zealand's South Island. It is the first such permit under new legislation designed to encourage exploration in New Zealand's frontier basins. During the initial 18 month term, Oxy will carry out geologic and seismic surveys. It has an option for a second 18 month term that calls for drilling of one wildcat.

XCL LTD., Lafayette, La., and partners China National Oil & Gas Exploration & Development Corp. and Apache Corp. found a second oil field on their Zhao Dong block in China's Bohai Bay. Their Zhao Dong D-1 wildcat flowed 1,109 b/d of oil with no water from pay at 4,1854,205 ft. The partners this month also spudded the C-3 appraisal well on the block's C structure, a June 1994 discovery (OGJ, July 4, 1994, Newsletter).

COMPANIES

MESA INC., Irving, Tex., expanded its restructuring plans to include consideration of a sale or merger and retained Lehman Bros. to manage those efforts. MESA's board also approved an 18 month shareholder rights plan to block takeover bids. The company recently filed suit against former MESA officer David Batchelder and major shareholders Marvin Davis and Dennis Washington, who formed a group to maximize MESA shareholder value (OGJ, July 10, p. 40).

SHELL CHINA HOLDINGS BV agreed to spend $50 million in two joint venture projects, one to produce 200,000 metric tons/year of asphalt and the other to produce 40,000 tons/year of lubricants, at the port of Zhapu in China's Zhejiang province. Shell is an 85% partner in the ventures with Jiaxing Zhapu Port Enterprise General Corp. Holding 10% and Zhejiang Province Communication Bureau Transportation Supplies Corp. 5%.

CAIRN ENERGY PLC, Dublin, agreed to buy the entire share capital of Clyde Petroleum (North Sea) Ltd. from Clyde Petroleum plc, Ledbury, U.K., for $57.2 million. The assets consist of 10% interests in U.K. North Sea Blocks 9/18a, 9/18b, and 9/18c and include the producing Gryphon oil field, Net reserves acquired total 6.6 million bbl of oil, and net Gryphon production averages 4,200 b/d of oil.

DRILLING-PRODUCTION

NAM, the Netherlands upstream company jointly owned by Exxon Corp. and Royal Dutch/Shell Group, let a $30 million contract to Integrated Solutions Alliance (ISA) to provide all nonrig related oil and gas well services for about 700 onshore and offshore wells for an initial 2 years. ISA is a partnership of Western Atlas Logging Services, Houston; Expro Group, Reading, U.K.; and Nowsco Well Service Ltd., Calgary.

LOMAK PETROLEUM INC., Fort Worth, agreed to buy leases in Pennsylvania and West Virginia from a unit of Parker & Parsley Petroleum Co., Midland, Tex., for $20.2 million. Included are about 825 producing wells, 300 miles of gas gathering lines, 16,400 net acres of undeveloped leases, and associated real estate and equipment. The leases hold more than 50 undrilled locations and will jump Lomak gas production by 30% to more than 34 MMcfd.

ARAKIS ENERGY CORP., Vancouver, B.C., secured $750 million in financing from Arab Group International (AGI), a Saudi led combine of three investment groups, for its Sudan oil development project. The project involves developing Greater Heglig and Unity fields in southern Sudan, laying a 24 in., 150,000 b/d pipeline to a proposed oil export terminal at Marsa Nimeiri on the Red Sea, and further exploration and development work. Arakis will issue AGI 23 million shares of stock for $345 million and receive a letter of credit for the balance.

ORLA PETCO INC., Midland, Tex., started injection of carbon dioxide in its East Ford field, Reeves County, Tex. Amoco Production Co. is supplying the CO2 under an agreement in which it will gain an interest in incremental oil production projected at 3-4 million bbl. Enron Liquids Pipeline Operating LP transports the CO2 through a recently laid 4 in. pipeline from El Mar field, Loving County, Tex. About 20 bcf Of CO2 will be needed during project life.

TEXAS LEGISLATORS extended from Sept. 1, 1996, to Sept. 1, 2002, the deadline for drilling or completing wells qualifying for the state's severance tax exemption for gas produced from high cost reservoirs. Officials estimate Texas producers since 1989 have drilled more than 6,000 wells because of the incentive, bringing an additional 5 tcf of gas to market and pumping $28 billion into the state's economy. Extending the incentive is expected to spur drilling of another 3,300 wells during 19972000.

JKX OIL & GAS PLC, Guildford, U.K., was scheduled to sell 23.8 million shares on London's Stock Exchange in a bid to raise 42 million ($109 million) for oil and gas development projects in Ukraine, Georgia, Dagestan, and the Caspian Sea (OGJ, Jan. 23, p. 20).

NORWAY'S Den norske stats oljeselskap AS signed a 10 year cooperation agreement with Transocean AS, Tananger, Norway, covering drilling services of four mobile rigs, fixed installations, oil based drilling fluids, and technological cooperation off Norway. Included are contracts or potential contracts for drilling in Norne and Asgard fields and Gullfaks field satellites, all off Norway. Drilling is to get under way in 1996 in the three areas.

FLEXTREND DEVELOPMENT CO. LLC, a unit of Leviathan Gas Pipeline Partners closed its purchase of three Tatham Off shore Inc. Gulf of Mexico leases for $30 million. Involved are 100% working interests each in Viosca Knoll Block 817 and Garden Banks Blocks 72 and 117. Leviathan and Tatham are Houston companies.

UNITED MERIDIAN CORP. (UMC), Houston, and Ghana National Petroleum Corp. agreed to study joint development of UMC's Block CI-01 off Cote d'Ivoire and to negotiate a take or pay sales contract for gas produced from the block, which abuts Ghana's border. Also to be studied are pipeline options for moving gas to power plants in Ghana and the feasibility of recovering liquefied petroleum gas. UMC last December obtained a production sharing contract on the block, which holds Ibex oil and gas field and Eland gas field, and is evaluating seismic and well test data. The study is to be complete by Aug. 31.

ENRON GAS & OIL TRINIDAD LTD. started production from Ibis oil and gas field off Trinidad. Its IB-2 well on the Southeast Coast Consortium block flowed on initial test more than 3,000 b/d of 360 gravity oil and 8 MMcfd of gas through a 24/64 in. choke with 4,500 psi flowing tubing pressure. A second development well is under way.

VENEZUELA'S Corpoven SA let four contracts worth a combined $4.5 million to Drillers Inc. DI de Venezuela, a unit of DI Industries Inc., Houston, to operate and maintain four Corpoven drilling rigs in the Barinas district of western Venezuela. This increases DI's Venezuelan fleet to 11 rigs from four last September

NORSK HYDRO AS will take a second quarter pretax writedown estimated at $120 million to reflect a sharp cut in estimated reserves for Lille-Frigg gas/condensate field on Norwegian North Sea Block 25/2. Operator Elf Petroleum Norge said a larger than expected reservoir pressure drop caused it to cut estimated reserves by 40% from the development plan's estimate of 250 bcf of gas and 23 million bbl of condensate. The field originally was to start production in October 1993 at a cost of $320 million but started up in May 1994 at a cost of more than $640 million. Both sums are in 1995 dollars.

REFINING

CZECH REPUBLIC approved plans for a combine of Conoco Inc., Agip SpA, and Royal Dutch/Shell Group to buy a 49% interest in its Kralupy and Litvinov refineries for $173 million plus investment in the plants. Total recently pulled out of the combine (OGJ, July 10, P. 35).

EUROPEAN BANK for Reconstruction & Development (EBRD) acquired for $59 million a 10.5% interest in Slovakia's refining and marketing company Slovnaft. EBRD bought more than half of 3.3 million Slovnaft shares offered on Czech Republic and Slovakia markets in a move to raise funds for a resid upgrading unit at Bratislava refinery. Last December EBRD loaned Slovnatt $30 million to upgrade its service station network.

AIR PRODUCTS & CHEMICALS INC. (APD), Allentown, Pa., and Mannesmann AG unit Kinetics Technology International Corp. broke ground for a $40 million, 80 MMcfd, high purity hydrogen plant next to its Chemical complex at Pasadena, Tex. Half the plant's output will move by pipeline to Lyondell-Citgo Refining Co. Ltd.'s Houston refinery. Other refinery/petrochemical customers in the area will take some of the plant output via APO's hydrogen pipeline along the Greater Houston Ship Channel. Start-up is slated for fall 1996.

PIPELINES

CENEX INC., Laurel, mont., Let a $34 million contract to agra industries ltd., Calgary, to lay a 16 in., 296 mile crude oil pipeline from Cenex's Santa Rita terminal near Cut Bank, Mont., to its 41,450 b/d refinery at Laurel. The project will include installation of a fiber optics cable in the same trench. Work is to begin in July and be complete in about 4 months.

GAS INDUSTRY STANDARDS BOARD (GISB), Houston, is circulating proposed electronic standards for U.S. gas sale nominations, confirmations, and schedule volumes. GISB, an industry group formed to adopt uniform standards for electronic data interchange, also has drafted proposed standards for pipeline capacity release.

TENNECO GAS AUSTRALIA completed purchase of the Pipelines Authority of South Australia. included are the 488 mile Moomba-Adelaide gas pipeline and related compression and metering stations. Tenneco meantime ordered pipe for the 470 mile Southwest Queensland gas pipeline to be laid starting this year to link fields in Southwest Queensland with Brisbane and Gladstone (OGJ, Jan. 23, p. 67).