INDUSTRY BRIEFS

COGENERATION

SITHE ENERGIES INC., New York, signed a 20 year agreement with Empire State Pipeline sponsors Union Energy Inc., Rochester Gas & Electric Corp., and units of Coastal Corp. to provide firm transportation of as much as 185 MMcfd of gas for the proposed Independence cogeneration plant near Oswego, N.Y. The $850 million plant will be the largest nonutility combined cycle cogeneration facility in the U.S., generating about 1 million kw of electricity and 235,000 lb/hr of process steam. Construction is to begin in 1993.

BIG THREE INDUSTRIES INC., Houston, plans a 37,000 kw cogeneration plant at Port Neches, Tex., that will produce 225,000 lb/hr of steam for an adjacent Texaco Chemical Co. complex. The plant will adjoin an air separation plant that is to produce 4,200 tons/day of oxygen and nitrogen. Most of the oxygen will supply a propylene oxide plant under construction at the Texaco complex (OGJ, Oct. 7, 1991, p. 44). The rest of the output will feed Big Three's 1,019 mile pipeline supplying chemical and petrochemical plants and refineries in Texas and Louisiana. Total project cost is about $66 million.

GAS PROCESSING

SHELL WESTERN E&P INC. let contract to Midwest Steel Equipment Co., Houston, to dismantle and sell a 100 MMcfd cryogenic gas processing plant in Kalkaska, Mich. The plant has been sold to an undisclosed company. Midwest Steel will dismantle and move the unit to an undisclosed site in New Mexico. The project is to be complete in May.

ENVIRONMENT

U.S. COAST GUARD issued the first final rule under the Oil Pollution Act of 1990, changing existing regulations to allow oil spill cleanup vessels with 50% or less foreign ownership to operate in U.S. waters effective Apr. 3. Previously only vessels with 100% U.S. ownership were allowed to engage in coastal cleanup activities of any kind. The change affects oil spill cleanup activity only and will make available more than 30 added vessels for cleanups.

PETROCHEMICALS

AMOCO CHEMICAL CO. let a contract valued at more than $100 million to S&B Engineers & Constructors Ltd., Houston, for detailed engineering, procurement, and construction for a major debottlenecking of the No. 2 olefins unit at its Chocolate Bayou petrochemical plant southeast of Houston. Completion is expected in June 1994.

MITSUBISHI CORP., Chevron Chemical Co., and Exxon Chemical Co. exported the first U.S. shipment of ethylene from the Galena Park terminal on the Houston Ship Channel (OGJ, Mar. 25, 1991, p. 36). The first shipment is destined for Polipropileno del Caribe SA in Colombia and will be used as a comonomer in polypropylene production.

NORTH SEA PETROCHEMICALS (NSP), a joint venture of Himont Inc. and Norway's Den norske stats oljeselskap AS, started up a 400,000 metric ton/year propane dehydrogenation plant at Kallo, near Antwerp (OGJ, Apr. 2, 1990, p. 17). The plant is the first to use the United Catalyst/Lummus Crest catofin process to manufacture propylene directly from propane and refinery grade propylene feedstock.

DRILLING-PRODUCTION

SUN OIL SHABWA YEMEN LTD. let contract to Parker Drilling Co., Tulsa, to begin a multiwell drilling program in southern Yemen. The contract calls for three wells to be drilled on the Yemen Amakeen concession. A helicopter transportable TBA 2000 rig will be shipped for June 1 spudding of the first well.

CO-ENERCO RESOURCES LTD., Calgary, acquired all of Esso Resources Canada's holdings in the Zama area of Alberta effective Mar. 1 , including all producing leases, associated facilities, and about 11,000 net acres of undeveloped land for about $29.5 million (Canadian). Co-enerco estimated proved reserves at 4.4 million bbl of liquids and 4.7 bcf of gas. The deal will increase its oil reserves by 36% and production by 24%.

QATAR LIQUEFIED GAS CO. (Qatargas) let contract to Ste, Nationale Elf Aquitaine (Production) for the Phase II sulfur recovery project in North gas field. Elf will handle conceptual design. The transaction is in line with continuing cooperation between Elf and Qatar General Petroleum Corp. on natural gas treatment that started in the 1980s with design of gas desulfurization and sulfur recovery units at Umm Said.

DESTEC ENERGY INC., Houston, acquired about 31 bcf of gas reserves in New Mexico's San Juan basin from a unit of Ensign Oil & Gas Inc., Denver, for an undisclosed price. Included are about 80 wells with total production of about 9 MMcfd and 35 wells yet to be put on production. Expected reserve life for all the wells is about 30 years. Destec, mainly known as an independent power developer, said the production is convenient for supplying existing and planned cogeneration plants.

SNYDER OIL CORP., Fort Worth, drilled 130 wells in its Wattenberg drilling program in Colorado in 1991 with 109 producing, 18 in the process of drilling or completion, and three dry. Production is about 1,500 b/d of oil and 26 MMcfd of gas net to Snyder's interest, and proved reserves associated with the development totaled 23 million bbl of oil equivalent (BOE) at yearend. Snyder plans to drill 300-500 wells in Wattenberg field the next 3-5 years.

ARCH PETROLEUM INC., Fort Worth, paid $8.9 million for interests in 168 gross wells on 26,400 gross acres in three multipay fields in Winkler, Reagan, Wise, and Jack counties, Tex. Arch acquired interests in 49 net wells and 4,800 net acres in the deal, including several 100% interest wells in Keystone Ellenburger field. Arch expects acquisition costs to average less than $4/bbl of oil equivalent.

COMPANIES

NORANDA INC., Toronto, purchased BP Exploration's interest in the Canadian Hunter joint venture operations in British Columbia for an undisclosed price. Noranda owns Canadian Hunter Exploration Ltd., the other partner in the venture. The deal includes a 50% working interest in Brassey oil field, an average 42% interest in several producing leases, and 340,000 net acres of undeveloped leases. BP's net share of production averaged 2,500 b/d of oil and 39 MMcfd of gas in 1991 .

REFINING

FARMER'S UNION CENTRAL EXCHANGE (Cenex) let contract to Foster Wheeler U.S.A. Corp. for detailed engineering, procurement, and construction of a sulfur recovery complex at its Laurel, Mont., refinery, Current throughput at the refinery is 42,500 b/d of heavy crude. The complex is the third part of Cenex's fluid catalytic cracker feed desulfurization project, intended to desulfurize 16,000 b/d of FCC feedstock. Total project cost is about $80 million. It is to be complete in 1993.

SHELL REFINING & MARKETING CO. this month will begin producing at its Martinez, Calif., refinery about 5,000 b/d of diesel fuel containing less than 500 ppm of sulfur for some California markets. The low sulfur diesel meets California Air Resources Board requirements that take effect in 1993. Current rules require sulfur content of less than 5,000 ppm.

IRAN commissioned a repaired vacuum distillation unit and a solvent plant at the Abadan refinery that were damaged during the Iran-Iraq war. The vacuum distillation unit feeds a catalytic cracker that eventually will be upgraded to convert heavy fuel oil to premium gasoline.

EXPLORATION

AGIP (U.K.) LTD.'S wildcat on Block 43/21 in the southern U.K. North Sea, about 70 km off Yorkshire, flowed 19.5 MMcfd of gas through a 1 in. choke on a drillstem test below 3,000 m. The well was plugged, and results are being evaluated prior to appraisal drilling. Agip holds 35% interest ;In the block, Sun Oil Britain Ltd. 30%, Deminex U.K. Oil & Gas Ltd. 20%, and OMV (U.K.) Ltd. 15%.

OCCIDENTAL DE COLOMBIA INC. acquired a farmout from Cia. de Petroleos Cordillera SA (Copeco) on the 500,000 acre Samore block in the Colombian Andes foothills that Copeco holds under an association contract with Empresa Colombiana de Petroleos. Oxy will earn a 75% working interest by conducting a seismic program and drilling one to three wells, depending on depth. The block, about 90 miles north of British Petroleum's Cusiana oil field and 40 miles west of Oxy's Cano Limon oil field, lies in a mountain front area on a trend that extends from Cusiana into Venezuela.

GARNET RESOURCES CORP., Houston, received a 4 year exploration permit covering 105,700 acres around Nimes in Southeast France. Garnet expects to spend about 9 million francs on the project. No oil has been found in the area, which has not been explored in more than 20 years.

HUSKY OIL LTD., Calgary, is giving more than $100 million in frontier exploration and production data to the Geological Survey of Canada. The data transfer, involving no cash, is part of a program by GSC to gather information on offshore and arctic operations as part of a national database. Husky will retain commercial control of the data and receive any commercial benefits that flow from its use by GSC.

TUNISIA'S hydrocarbon consultative committee awarded exclusive rights to negotiate an exploration permit covering the 981,500 acre Serj license area (N-2 Block) to a group led by Ameritex Minerals of Tunisia Corp., not Marathon Oil Co. as reported (OGJ, Mar. 9, p. 43). Ameritex group members Ameritex Tunisia, a subsidiary of Ameritex Minerals Inc., San Antonio, Overseas Petroleum Investment Corp., Taipei, and Edisto Resources Corp., Dallas, plan to sign final contracts and begin an exploration program soon.

HARKEN ENERGY CORP., Dallas, is evaluating other prospects on its Bahrain production sharing area at Jarim Reef, Sitra Bay, and Muharraq Island in the Persian Gulf after plugging its 2 Jarim wildcat as dry (OGJ, Nov. 18, 1991, p. 36).

LABOR

ABOUT 10,000 EMPLOYEES of Pakistan's Oil & Gas Development Corp. (OGDC) working in the Pirkoh gas fields in Balochistan province resumed work Mar. 1 following a 1 day strike that shut off about 25% of the country's oil and gas supplies. The strikers were demanding that two workers kidnapped Feb. 22 be released, which occurred Mar. 1.

GOVERNMENT

ONTARIO will cut its share offering of stock in Suncor Inc., Toronto, to about 11% from 25% because of weak markets for oil stocks. The provincial government originally planned to sell its entire 25% stake in Suncor (OGJ, Feb. 10, p. 47), which operates an oilsands plant at Fort McMurray, Alta.

TRANSPORTATION

SHELL MARKETS MIDDLE EAST'S $4.3 million products terminal at Dubai is complete, replacing a 20 year old oil berth at Port Rashid. The terminal, Dubai's only facility for refined products imports, will receive tankers no larger than 40,000 dwt. Shell imports products at the terminal on behalf of the U.A.E.'s Emirates Central Petroleum Corp. and Caltex al Khalij.

U.S. COURT OF APPEALS in Washington, D.C., ruled the Iroquois gas pipeline linking Canada to the U.S. Northeast was properly approved by U.S. authorities last year (OGJ, Feb. 18, 1991, Newsletter). The ruling rejected challenges by environmentalists, neighbors of the 370 mile pipeline, and competitors in the U.S. gas industry.

MISSOURI PIPELINE CO., Tulsa, a unit of ESCO Energy Inc., Dallas, began operating a 16 in., 30 mile gas pipeline into Franklin County, Mo., the first part of a 57 mile line to transport gas to Laclede Gas Co. in western St. Louis County (OGJ, Nov. 11, 1991, p. 22). The second part of the project, a 10 in., 27 mile segment, is to be complete in April. It will boost ESCO's 10 year supply contract with Laclede to 55 MMcfd from 25 MMcfd. A 67 mile gas line to Fort Leonard Wood, Mo., is to be complete in June.

SCOTIAMCLEOD INC. heads a group of underwriters that will buy GW Utilities' controlling interest in Interprovincial Pipe Line Inc., Edmonton, for a net $625 million (Canadian). The Reichmann family of Toronto holds a 63.5% interest in IPPL through GW Utilities. The underwriters will market the shares in a public offering. The pipeline company said the stock sale will not affect its operations.

FUTURES

NEW YORK MERCANTILE EXCHANGE estimated the volume of sour crude oil futures contracts at 1,853 after the first day of trading Feb. 28, nearly matching the most successful contract launch in Nymex history. Light sweet crude futures trading reached 1,884 contracts its first trading day Mar. 30, 1983, and the natural gas contract traded 918 contracts on Apr. 3, 1990.

MARKETING

EGYPT AND LIBYA agreed to form a joint venture to market Libya's refined products along the coastal highway between Alexandria and Salyum, Egypt, Xinhua News Agency reported. A 560 km pipeline will be built linking Tobruk, Libya, and Alexandria to supply stations along the route. The countries also agreed to form joint venture companies dealing with petroleum services and petrochemicals, but further details were not disclosed.