INDUSTRY BRIEFS

MARKETING

U.S. DISTRICT COURT in Los Angeles blocked Exxon Corp.'s plans to exit the retail gasoline market in Los Angeles, Orange, and Ventura counties, Calif., until a trial can be held. Exxon planned to withdraw Nov. 30 in a cost cutting move (OGJ, May 25, p. 18). Dealers sued the company to keep it from abandoning the market, contending the pullout would violate the Petroleum Marketing Act, which requires oil companies to make good faith offers to sell stations to dealers if the company withdraws from a market.

GAS PROCESSING

MESA INC., Dallas, completed expansion of its Fain natural gas processing plant in West Panhandle field, Tex., increasing capacity to 10,800 b/d from 7,500 b/d (OGJ, June 17, 1991, p. 32). MESA expects average production of 8,500 b/d during 1993, compared with 7,500 b/d in 1992. Natural gas inlet capacity increased to 120 MMcfd from 90 MMcfd. MESA also expects to begin extracting as much as 160 MMcf/year of helium next January.

EXPLORATION

LOUISIANA LAND & EXPLORATION CO.'S LL&E Yemen Ltd. unit acquired a 17% interest in Yemen's 1.18 million acre Block 9 Al-Hajar operated by Crescent Petroleum (Shabwa) Inc. under a production sharing agreement (PSA) signed in January 1991. Crescent has gathered, processed, and interpreted 1,200 line km of seismic data. Two wells are to be drilled on the acreage during the PSA's initial 4 year term ending in January 1995. British Gas Exploration & Production Ltd. also holds an interest in the block.

SHELL INTERNATIONAL PETROLEUM CO. LTD. drilled a gas discovery with its Obayyed wildcat in Egypt and has begun appraisal drilling. Some sources place reserves at 1.4 tcf of gas, but Shell did not confirm this. Shell has spent $75.7 million exploring the Abayed and Matruh blocks in Egypt and pegs exploration and development spending in the region at $2.42 billion since 1979.

CNG

SOUTHERN UNION ENERGY INTERNATIONAL INC., Austin, and Grupo Diavaz SA de CV, Mexico City, opened the first natural gas refueling station in Mexico Nov. 9 at Monterrey. The two companies formed a joint venture, Gas Automotores SA de CV, to open CNG refueling stations and vehicle conversion facilities in Mexico (OGJ, Oct. 19, p. 41).

MESA will offer its natural gas vehicle conversion program to public and private fleet operators in Albuquerque and Santa Fe, N.M., marking the ninth and 10th U.S. cities to which MESA has extended its conversion offer (OGJ, Oct. 5, p. 38). The offer calls for MESA to convert fleet vehicles and install fueling facilities in exchange for fuel supply contracts under which CNG is sold at or below the price the fleet operator would pay for gasoline.

PETROCHEMICALS

METHANOL DE ORIENTE, a joint venture of Petroleos de Venezuela SA, Mitsubishi Corp., Mitsubishi Gas Chemicals, Venezuela's Grupo Polar, and Corp. Financiera Internacional, let a contract to Mitsubishi Gas Chemicals to provide technical assistance for a 735,000 metric ton/year methanol plant under construction in eastern Venezuela (OGJ, Aug. 10, p. 26). The plant is to be complete in 1994.

UNION CARBIDE CHEMICALS & PLASTICS CO. INC., Seadrift, Tex., agreed to pay a $1.5 million penalty and to ensure workplace safety procedures at its ethylene oxide plant in Texas. The Occupational Safety and Health Administration cited the company after a fire and explosion at the site in March 1991 (OGJ, Apr. 8, 1991, p. 36), proposing penalties of $2.8 million.

GLOBAL OCTANES CORP. started up the first U.S. on-purpose grassroots dehydrogenation plant producing isobutylene for methyl tertiary butyl ether (OGJ, May 20, 1991, p. 25). The 12,500 b/d MTBE plant at Deer Park, Tex., uses ABB Lummus Crest Inc.'s Catofin dehydrogenation technology. Lummus Crest provided basic engineering, precommissioning, commissioning, and start up assistance for the project, which cost more than $200 million.

TRANSPORTATION

MOBIL NORTH SEA LTD. opened the Scottish Area Gas Evacuation (SAGE) plant at St. Fergus, Scotland. Initial deliveries to British Gas plc and independent gas marketing companies are expected to average 265 MMcfd. Gas comes from Mobil's Beryl field. A second terminal, to be complete in 1994, will take gas from Brae fields, operated by Marathon Oil U.K. Ltd., and Amerada Hess Ltd.'s Scott field.

CENTRA GAS MANITOBA INC., Winnipeg, Man., plans to store 15 bcf of gas in rock caverns in Michigan under a 20 year storage deal with ANR Pipeline Corp., Detroit. Centra figures it will pay about $11.5 million for storage rights but save about $15 million, allowing it to avoid increased pipeline demand charges planned by supplier Western Gas Marketing Ltd., Calgary.

AMERICAN PIPELINE CO., Houston, plans a two phase expansion and upgrading of pipeline capacity in Webb and Duvall counties, Tex. Late this month the company plans to complete a 85 MMcfd, 16 mile, 12 in. line connecting Conoco Inc.'s Benavides/Vaquillas field to its system and the Valero Transmission LP line. American will install a 1,500 hp compressor station on the 110 mile Webb/Duval Gatherers system that will increase throughput by about 30 MMcfd. The expansion is to be complete in December.

U.S. DEPARTMENT OF TRANSPORTATION proposed a dozen minor changes in its reporting and operating requirements for gas pipelines and LNG facilities. It said the changes, detailed in the Nov. 6 Federal Register, will reduce the regulatory burden and reporting requirements for industry without compromising safety.

U.S. COAST GUARD proposed a rule to allow oceangoing vessels to navigate in certain sections of Alaska's Prince William Sound with two licensed officers rather than a federal pilot. The Coast Guard said it often is dangerous for pilots to board ships at Hinchinbrook entrance, and the presence of two officers on the bridge should reduce navigational risks for ships.

EXPORTS-IMPORTS

KUWAIT exported Nov. 7 about 1.3 million bbl of crude recovered from the large surface lakes of oil formed after Iraqi troops sabotaged the country's wells (OGJ, Apr. 6, p. 32). The crude was shipped to Europe. Oil Minister Ali Al-Baghli said the oil lakes are thought to have contained 20-25 million bbl originally, and more than half that amount has been recovered. Agence France Presse reported the crude brings $9-11/bbl.

DRILLING-PRODUCTION

JAPAN'S Itochu Corp. plans to join the joint venture of Anderman/Smith Operating Co., Denver, and Russia's Chernogorneft Oil & Gas Enterprise aimed at developing Chernogorskoye oil field in Tyumen province (OGJ, Oct. 19, p. 25). Itochu will pay about $4.5 million for a 20% interest in the project. Oil production of about 1,200 b/d is to start in December, then increase to 35,000 b/d within 5 years.

MOBIL NORTH SEA started producing gas from its Tristan field in the North Sea's southern gas basin, 60 miles off England's east coast. Mobil expects to produce about 22 MMcfd, which will become part of Mobil Gas Marketing (U.K.) Ltd.'s Supply pool for sale to industrial and commercial customers. Tristan reserves are pegged at 28 bcf. The field is being produced by a single horizontal well drilled into the Tristan structure via the Welland gas field platform.

IMPERIAL OIL LTD. began steaming operations at mothballed Phases 7 and 8 of its heavy oil operation at Cold Lake, Alta. The two phases, to go on stream in second quarter 1993, will increase Cold Lake production by 19,000 b/d to about 104,000 b/d. The $220 million expansion was completed in 1987 but mothballed because of weak crude prices. It was postponed again in 1991. Imperial said increased demand for heavy oil is a factor in its decision to proceed.

DIAMOND M-ODECO DRILLING INC., Houston, purchased the Sea Explorer rig from NatWest Rentals Ltd. and renamed it Ocean Guardian. The unit is an enhanced Sedco 700 design, third generation semisubmersible built in 1985 that has been upgraded to meet North Sea requirements. It is being prepared to drill one well in the U.K. North Sea for British Petroleum that is to begin this month. The purchase brings Diamond M-Odeco's offshore fleet to 43 rigs, with 38 actively marketed.

ANADARKO PETROLEUM CORP., Houston, plans to install a platform on High Island Block A 376 in the Gulf of Mexico, site of a wildcat that cut 178 ft of net hydrocarbon pay below 10,761 ft. No flow tests were run, and drilling has been suspended. A delineation well is planned early next year. The wildcat tapped a reservoir separate from those found in 1979. A production platform installed on the block in 1981 has 26 wells that have produced 9.1 million bbl of oil and 55.2 bcf of gas.

PLAINS RESOURCES INC., Houston, 1 Miami Fee sidetrack in Cameron Parish, La., flowed at a rate of about 2.5 MMcfd of gas and 200 b/d of condensate through a 10/64 in. choke with 4,450 psi flowing tubing pressure from Tertiary Vicksburg sands at 14,740-15,705 ft true vertical depth. Sidetracking was made necessary by collapsed casing in the discovery well (OGJ, Dec. 16, 1991, p. 33), which initially flowed 23.3 MMcfd of gas and 1,353 b/d of 55 gravity condensate.

SHELL INTERNATIONAL placed on stream its Apyuk onshore gas field in Myanmar, the only significant discovery since Myanmar reopened exploration to foreign contractors in October 1989. Apyuk gas was to be delivered to the national gas grid, but it is being used to fuel a local power station. Volume figures are not available, but the original scheme placed initial production at 20 MMcfd.

LASMO NEDERLAND BV started production from Markham gas field in the North Sea, the first offshore development astride the U.K.-Netherlands line. Production, from Permian Rotliegendes sandstone, is expected to peak at about 245 MMcfd. Most of the gas will be sold to Netherlands' gas utility Gasunie, with the remainder under contract to Wintershall of Germany.

COMPANIES

CONOCO INC. plans to eliminate 158 jobs company wide, 129 of which are at its Ponca City, Okla., location. The company said 114 employees will be laid off, 17 will be reassigned, and 27 will be placed in a program to find other positions in the company. The reductions are to be complete by yearend. Since the beginning of the year 400 employees have been laid off and 200 reassigned.

PAN-ALBERTA GAS LTD., Calgary, and Natural Gas Clearinghouse, Houston, formed Natgas Canada Inc., a 50-50 gas marketing company. Natgas will serve producers and consumers in eastern Canada and the U.S. The partners will operate offices in Calgary, Houston, Chicago, and Toronto.

VALERO ENERGY CORP., San Antonio, completed Phase 1 of a reorganization program designed to improve efficiency and reduce costs by reducing layers of management. Valero offered voluntary early retirement to 177 employees in August, and 72 accepted. The program ended in October. Total cost was $6 million, to be paid during 17 months. Total savings is $4.3 million/year.

REFINING

TOTAL will supply refined products customers in eastern and southeastern France from its other French refineries after shutting down its 120,000 b/d Provence refinery in La Mede for several weeks following a Nov. 9 cat cracker explosion and fire that killed five employees, seriously injured one, and left one missing. Cause of the blast still was unknown at presstime, but a process vessel gas leak is suspected. A fire that spread from the cat cracker to adjoining facilities was extinguished in 4 hr.

MOBIL OIL SINGAPORE began construction of a $93 million catalytic hydrodesulfurization unit that will boost diesel production at its refinery by 25,000 b/d. The unit is capable of producing diesel with 0.05 wt % sulfur, enabling Mobil to meet regional demand for low sulfur diesel well into the next century. The project, to be complete in January 1994, includes a 25,000 b/d amine unit and a 120 ton/day sulfur recovery unit.

ENVIRONMENT

U.S. ENVIRONMENTAL PROTECTION AGENCY proposed rules to require high tech emissions testing for cars in metropolitan areas that exceed federal ozone and carbon monoxide limits. EPA said the new inspection program will be at least three times more effective than current programs in reducing emissions, and the resulting fuel economy savings of 7-13% will offset the cost of repairs to cars and save 15 million bbl/year of oil.

COGENERATION

CONSOLIDATED NATURAL GAS CO., Pittsburgh, and Niagara Mohawk Power Corp., Syracuse, will begin construction before yearend of a $262 million, 237,000 kw cogeneration plant in Lakewood, N.J. The plant will burn an estimated 7 bcf/year of natural gas to supply electricity to Jersey Central Power & Light Co. and steam to American Eagle Distillation Corp. and others. Consolidated holds a 35% interest in the project, Niagara 45%, and Tomen Corp., Tokyo, the remainder.