INDUSTRY BRIEFS

GAS PROCESSING

SAUDI IRON & STEEL CO. let contract to ABB Randall Corp. to design, engineer, and provide fabrication services for two natural gas pretreatment plants that will remove ethane and propane and provide ultrapure methane to a Saudi Iron Midrex direct reduction sponge iron plant. The ultrapure methane significantly reduces catalyst degradation. The units, to be shipped to Al-Jubail, Saudi Arabia, each will process about 63.5 MMcfd of natural gas. The project is to be complete by late spring 1993.

SAGASCO RESOURCES LTD. started up its $9 million (Australian) natural gas treating plant at Beharra Springs about 350 km north of Perth in Western Australia. Design and commissioning of the plant were accomplished in 9 months.

EXPLORATION

RED EAGLE RESOURCES CORP., Oklahoma City, signed a production sharing agreement with Yemen covering Block 13 (OGJ, Apr. 27, p. 14). Red Eagle plans to spend about $50 million in the initial two phases of work, which includes acquiring 1,200 line km of seismic data and drilling three wildcats in about 21/2 years. Red Eagle will begin geologic and seismic evaluation immediately.

AMERADA HESS LTD.'S 15/21b-47 wildcat in the U.K. North Sea flowed 5,880 b/d of 31.5 gravity oil through a 70/64 in. choke with a gas:oil ratio of 625:1 from upper Jurassic. The well has been sidetracked to gauge extent of the field, to be named Perth. Interests are Amerada 42.084%, Deminex U.K. Oil & Gas Ltd. 43.333%, Kerr-McGee Oil (U.K.) plc 10.833%, and Pict Petroleum plc 3.750%.

NORCEN INTERNATIONAL LTD., Calgary, agreed to transfer its 15% working interest in PPL-82 off Papua New Guinea containing Pandora gas field to a group that includes Mobil Oil Corp. and Japanese interests in exchange for payment tied to the level of the group's expenditures on the license. If group outlays reach the agreed maximum, payments to Norcen will total $1.25 million. If a discovery is made on the license, Norcen will receive an added $1.5 million at first production. If after drilling B1X Pandora wildcat the group elects not to complete the earning program, Norcen can regain its 15% stake at no extra cost.

ENERGY DEVELOPMENT CORP., Houston, and China Petroleum Exploration Corp. began exploration on Boyang Lake in East China's Jiangxi Province (OGJ, Nov. 4, 1991, p. 36). Beijing's Xinhua News Agency said initial work in the 3 year first phase of the project is nearly complete. The entire exploration program will cost about $30 million.

PAKISTAN'S Oil & Gas Development Corp. found oil and gas at Sadkal near Fatehjung in Pakistan's Attock district. OGDC 1 Sadkal cut two pay zones with a combined productive capacity of 3,311 b/d of 40-410 gravity oil and 19.23 MMcfd of gas after treatment. Further testing of the discovery well and work on an appraisal are under way.

PIPELINES

TEXAS EASTERN TRANSMISSION CORP. (Tetco), Houston, signed a letter of intent to lease 250 MMcfd of capacity in a 500 MMcfd gas pipeline to be built and operated in Mississippi by Endevco Inc., Dallas, and others. The proposed 30 in. line, running 82 miles from Arkla Energy Resources' planned Line AC extension near Shaw, Miss., to Tetco's Kosciusko, Miss., compressor station, could transport Arkoma and Anadarko basin gas. Lease term would be 15 years from the date Arkla places the Line AC extension in service.

AMOCO NETHERLANDS PETROLEUM CO. let contract to Allseas Marine Contractors to lay the main 40 km line to shore from its $500 million, P-15/18 gas field development project and 70 km of in-field lines (OGJ, June 1, p. 44). Amoco also let contract to Visser & Smit Hanab BY to lay the part of the pipeline that will go under the Maas River estuary.

SANTA FE PACIFIC PIPELINE PARTNERS L.P. started up the $23 million expansion of its East Line refined products pipeline from El Paso to Tucson and Phoenix. Pumping capacity between El Paso and Tucson increased to 95,000 b/d from 67,000 b/d and between Tucson and Phoenix to 50,000 b/d from 25,000 b/d. An earlier expansion, completed in February 1989, increased capacity of Santa Fe's West Line between Los Angeles and Phoenix and started delivery of products from Los Angeles to Tucson.

CANADA'S National Energy Board approved plans of Westcoast Energy Inc., Vancouver, B.C., for a looping project on its natural gas pipeline system. The company will lay 20 miles of loop on its southern main line from Willow Flats, B.C., to a Canada-U.S. border point near Huntingdon, B.C. The $40 million project, to serve Canadian and export markets, will add 87 MMcfd, or 5.4%, to system capacity.

PETROCHEMICALS

CHINA PETROCHEMICAL INTERNATIONAL CO. chose ABB Lummus Crest Inc.'s short residence time ethylene technology for modernization and expansion of Beijing Yanshan Petrochemical Corp.'s ethylene plant (OGJ, Mar. 2, p. 30). Design capacity will increase to 450,000 metric tons/year from 300,000 tons/year. The project is to be complete by September 1994.

CHINA let contracts to Toyo Engineering Corp. and Mitsui Petrochemical Industries Ltd. to provide technology and equipment valued at $120 million for its Guangzhou petrochemical complex (OGJ, Apr. 29, 1991, p. 40). Toyo will provide technology and equipment for a 100,000 metric ton/year polyethylene plant, and Mitsui will provide technology for a 70,000 ton/year polypropylene plant. The complex also will produce 115,000 tons/year of ethylene, 80,000 tons/year of styrene, and 50,000 tons/year of polystyrene.

SAUDI ARABIA'S National Methanol Co. signed with eight Saudi banks for a $275 million loan to finance its 700,000 metric ton/year methyl tertiary butyl ether plant under construction at Al-Jubail (OGJ, June 10, 1991, p. 28). The plant is to be on stream by yearend 1993.

DRILLING-PRODUCTION

CHINA'S Bohai Oil Co. began production in Jinzhou 20-2 oil and gas/condensate field in the Liaodong Gulf (OGJ, Jan. 6, p. 30). The field will have six platforms and 14 wells when fully developed, with productive capacity of 53 MMcfd of gas and 3,035 b/d of condensate. Production is being transported via a 48.6 km, 12 in. pipeline to a gas processing plant in Xingcheng.

PLAINS RESOURCES INC., Houston, acquired Lasmo plc's interest in Willow Bayou gas prospect in Cameron Parish, La., for 600,000 common shares, or 5.4%, of Plains stock, valued Aug. 5 at $8.55 million. The deal gives Plains a 92% stake in the prospect before payout. The prospect includes about 20,000 acres around the Willow Bayou discovery well, an oil and gas gathering and transmission station, and related production facilities.

BASIN EXPLORATION INC., Denver, plans to acquire from an undisclosed joint venture partner additional working interests in wells Basin operates in Colorado's Denver-Julesburg basin. The $5 million deal will increase Basin's ownership interest in 105 wells. Recompletions in Cretaceous J sand, Codell, Sussex, and Shannon, delayed pending the acquisition, are to begin immediately. Basin plans 50 recompletions by the end of third quarter 1992 and 100 by yearend.

BP EXPLORATION OPERATING CO. LTD.'S 206/8-9z high angle appraisal well in Clair field off western Scotland flowed at a maximum rate of 7,300 b/d of oil from Devonian-Carboniferous (OGJ, Apr. 27, p. 19). A 6 day flow test showed a restricted flow rate of 5,200 b/d, beating a previous best Clair flow of 3,100 b/d without stimulation. Measured depth is 3,700 m, true vertical depth 1,996 m. Bottomhole location is more than 2 km from the surface location. BP said the 1,560 m high angle reservoir section is one of the longest drilled off the U.K.

CONOCO (U.K.) LTD. exchanged its 2.875% interest in North Sea Blocks 48/12a and 48/13b for Mobil North Sea Ltd.'s one-third share in Block 206/9, increasing Conoco's interest in Clair field and increasing Mobil's share in the Galahad gas discovery.

SHELL U.K. EXPLORATION & PRODUCTION is to spend more than 70 million ($135 million) refurbishing Leman gas field in the North Sea to give it another 25 years of life and cut operating costs. Processing will be transferred from six satellite platforms to the central compression complex, reducing maintenance and worker levels.

TEXACO BRITAIN LTD. wants to sell a portion of its 23.5% holding in the North Sea's Piper field as part of its review and management of North Sea assets.

REFINING

INDUSTRIA SICILIANA ASFALTI E BITUMI, a unit of Italy's ERG Group, let contract to Foster Wheeler Italiana SpA, Milan, for basic engineering of a $900 million, 500,000 kw, integrated gasification combined cycle cogeneration plant fed by gasified high sulfur refinery resid at ISAB SpA's 220,000 b/d Priolo Gargollo, Sicily, refinery (OGJ, July 6, p. 38). The plant will produce scrubbed gas to fuel gas and heat recovery steam turbines to generate electricity as well as hydrogen for the refinery. It will use Texaco's Inc.'s gasification technology.

U.S. ENVIRONMENTAL PROTECTION AGENCY and the U.S. Justice Department fined Chevron U.S.A. Inc. $1 million for allegedly allowing benzene to leak from its Philadelphia refinery. Chevron agreed to pay the fine within 30 days and bring the refinery into compliance as part of a civil court settlement.

JAPAN'S Idemitsu Kosan Co. will join Malaysia's Petronas and a trading unit of South Korea's Samsung Group to build a refinery at Malacca on the Strait of Malacca, Kyodo News Service reported (OGJ, July 20, p. 23). In the first phase, Petronas will build a 100,000 b/d sweet crude refinery. Idemitsu and Samsung will join Petronas for the second phase, which includes a 40,000 b/d refinery for Middle East crude. Products will be shipped to Japan and Southeast Asia. A formal contract could be signed as early as September, Kyodo said.

GOLDEN WEST REFINING CO., Santa Fe Springs, Calif., and parent Thrifty Oil Co., Downey, Calif., filed Chapter 11 bankruptcy after 6 months of trying to restructure primary debt. Golden West shut down its 44,000 b/d Santa Fe Springs refinery in February due to poor margins.

MARAVEN SA reported a fire Aug. 5 at its 286,000 b/d Cardon refinery in eastern Venezuela. Extent of damage and possible causes were not disclosed. The plant is undergoing a major revamp.

COMPANIES

PETROLEOS DE VENEZUELA SA signed a letter of intent with Japan's C, Itoh & Co. Ltd. and Marubeni Corp. covering study of possible joint ventures in developing and upgrading extra heavy crude from Venezuela's Orinoco oil belt. The three also will study other possible projects in exploration and production, an arrangement similar to those Pdvsa has with other foreign multinationals (OGJ, Aug. 3, p. 22).

JAPAN'S JGC Corp. completed purchase of a 45% interest in M.W. Kellogg Ltd., London, for $20 million (OGJ, Aug. 3, p. 33). Kellogg says the move will strengthen the international appeal of the London subsidiary.

CHEVRON CANADA RESOURCES (CCR) and Chevron Exploration & Production Services Co. (CEPS) took steps to restructure and cut staff in an effort to cut overhead costs by about 25% by yearend. CCR gave enhanced voluntary retirement packages to 89 employees and redeployed 90 others within the company and parent Chevron Corp. Another 140, about 10% of CCR's work force, are being laid off. CEPS, based in Houston with personnel in Calgary, combined with the computer portions of CCR's technical services division and report to the newly formed Chevron Petroleum Technology Company, Houston.

TUSKAR RESOURCES PLC, Dublin, agreed to sell its 36% interest in its Colombian licenses to Coplex Resources NL of Australia for 11 million Coplex shares or $5.3 million cash payable in August 1993 (OGJ, June 8, p. 34). Tuskar could not afford to fund its Colombian drilling commitments.

TANKERS

MARAVEN'S Borburata oil tanker was scuttled after a fire disabled it in the Gulf of Venezuela. At the time of the fire, the tanker was returning to port in Venezuela after offloading a 200,000 bbl cargo of crude at the Curacao refinery operated by Maraven parent Petroleos de Venezuela SA. The tanker, built 12 years ago, was carrying no crude at the time, and there were no reported injuries or environmental damage.

EXPORTS-IMPORTS

MEXICO AND VENEZUELA again approved a 1 year extension of the San Jose accord, their joint agreement to supply as much as 160,000 b/d of crude and products to 11 Central American and Caribbean countries under preferential terms. Under the accord, 20-25% of the price of the oil is financed, sometimes by long term soft loans. Venezuela estimates its sales under the accord represents a financial commitment of $111 million during August 1991-August 1992.

AFGHANISTAN agreed to supply natural gas to the former Soviet republic of Tadzhikistan. The two nations will conduct a joint feasibility study of supplying Afghan gas to the largely Muslim republic. The former Soviet Union purchased Afghan gas from fields in northern Jusjaan province until Soviet troops pulled out of the country in 1989.