INDUSTRY BRIEFS

ENVIRONMENT

ENVIRONMENTAL PROTECTION AGENCY included parts of Virginia, Connecticut, and New Hampshire in regions that will be required to use reformulated gasoline because they do not meet U.S. air quality standards. Governors of the three states asked for the inclusion.

COMMODITIES

NEW YORK MERCANTILE EXCHANGE voted to relist the November 1992 unleaded gasoline futures contract with a minimum oxygen requirement of 0%. Nymex plans to offer November contracts Feb. 3 and will add a month when each contract ends, keeping a 9 month list, The oxygen requirement listing will continue as is until Nymex receives more data on Environmental Protection Agency plans to implement 1990 Clean Air Act amendments, which call for higher oxygen levels in gasoline in certain areas of the U.S. beginning in November 1 992.

PETROCHEMICALS

IRANIAN MINISTRY OF OIL let a $358 million contract to a combine of Tomen Corp., Kawasaki Heavy Industries Ltd., and Kellogg International Corp. to build a chemical fertilizer plant at Bojnurd in Khorasan, Northeast Iran. Capacity will be 330,000 metric tons/year of ammonia and 500,000 tons/year of urea. Japan's Export-Import Bank will fund about 85% of the contract. Completion is scheduled for fall 1994.

SAUDI METHANOL CO. (Ar-Razi) started up expanded methanol capacity in late December, doubling plant capacity to 1.27 million metric tons/year (OGJ, Sept. 18, 1989, p. 27). The expansion makes Ar-Razi the largest methanol plant in the world and brings total methanol capacity of Saudi Basic Industries Corp. (Sabic) to 1.97 million tons/year. Ar-Razi is a joint venture of Sabic and a Japanese group headed by process technology licensor Mitsubishi Gas Chemical Co.

EXXON CO. U.S.A. asked the Texas Air Control Board for a permit to build a 7,000 b/d methyl tertiary butyl ether unit at its Baytown, Tex., refinery. Construction contracts are to be let about mid-1992 with start-up expected by yearend 1993. Exxon expects to spend $100 million to build the Baytown MTBE plant and a similar unit at its Baton Rouge, La., refinery.

BASF CORP. plans to buy the 620 million lb/year polystyrene resin business of Mobil Chemical Co. The deal includes the 120 million lb/year expansion of high impact polystyrene capacity that came on stream in June 1991 at Joliet Ill. (OGJ, Sept. 23, 1991, p. 20), and plants in Santa Ana, Calif., and Holyoke, Mass. Mobil will continue to operate its polystyrene fabricating businesses.

CHINA NATIONAL TECHNICAL IMPORT & EXPORT CORP. let a $36.9 million contract to Air Liquide, France, for a 2,600 ton/day oxygen and nitrate unit, part of a 300.000 ton/year ammonia and 500,000 ton/year urea plant to be built by Marubeni-UBE and Toyo Engineering for start-up in 1995. The complex at Weihe, near Xian in Shaanxi province, will use feedstock from gasified coal.

QATAR'S government let contract to the U.K.'s Penspen to build a 730,000 ton/year methanol plant at Umm Said. Acting Minister of Finance and Petroleum Al Thani said the project is another step aimed at using North field gas for Qatari industrial development.

LNG

QATAR GENERAL PETROLEUM CORP. let contract to Kellogg International Corp. to act as managing consultant for design and construction of its $4 billion liquefied natural gas export project at Umm Said. Work is to begin early in 1993 and be complete by yearend 1996 to supply 4 million metric tons/year of LNG to Japan's Chubu Electric Co. under a 25 year contract (OGJ, Mar. 4, 1991, Newsletter).

TANKERS

U.S. COAST GUARD proposed a rule to prevent oil tankers from using automatic pilots near shore in response to the Mar. 24, 1989, Exxon Valdez tanker spill off Alaska. The ban would apply to automatic pilots in traffic separation lanes, regulated navigation areas, shipping safety fairways, anchorage areas, vessel tracking system areas, and anywhere within 1/2 mile of shore.

REFINING

TEN U.S. COMPANIES formed the Independent Refiner/Marketers Association (IRMA), San Antonio, to represent its members' views on legislative and regulatory matters. IRMA founding members are Ashland Oil Inc., Clark Oil & Refining Corp., Coastal Corp., Diamond Shamrock Inc., Flying J Inc., Kerr-McGee Refining Corp., Mapco Inc., Marathon Petroleum Co., Total Petroleum Inc., and United Refining Co.

CONOCO INC. plans to improve efficiency at its 138,000 b/d Ponca City, Okla., refinery by restructuring maintenance operations. Conoco will add 66 full time craft and labor positions and reduce the number of casual, temporary, and contract workers. Conoco said the number of positions to be eliminated has not been determined, but it will be more than the number of workers added.

SINGAPORE REFINING CO. let contract to Stone & Webster Corp. to supply resid fluid catalytic cracking technology and basic engineering for a 27,000 b/d FCC, part of an expansion of the Pulau Merlimau refinery in Singapore. The unit is due on stream late in 1994.

HONAM OIL REFINERY CO. LTD. of South Korea, will use Stone & Webster technology for a 50,000 b/d residue FCC unit at Yeochun. Due to start up late in 1994, it will be the largest unit of its kind in South Korea.

LYONDELL PETROCHEMICAL CO., Houston, took the FCC unit at its 235.000 b/d Houston refinery out of service Jan. 17 for turnaround. It is to be back in service early in March. During turnaround Lyondell plans to start several projects to improve efficiency and environmental performance of the unit. Fire damaged a crude unit there earlier this month, causing a 100,000 b/d reduction in crude runs. Repairs are to be complete by February.

ACQUISITIONS

LASMO PLC received acceptances of its purchase offer from Ultramar plc shareholders totaling 90.6% of Ultramar's issued ordinary share capital (OGJ, Dec. 23, 1991, Newsletter).

ANDERSON EXPLORATION LTD., Calgary, completed the purchase of Columbia Gas Development of Canada Ltd., the Canadian oil and gas exploration and production unit of Columbia Gas System Inc., Wilmington, Del., for $109.3 million (Canadian) (OGJ, Dec. 9, 1991, p. 30) and will operate it as Anderson Oil & Gas Inc. Columbia Gas System plans to focus on the Southwest, Midcontinent, Rocky Mountain, and Appalachian regions of the U.S., as well as the Gulf Coast and California.

EXPLORATION

OCCIDENTAL GABON INC. took a farmout from Du Pont E&P No. 8 By on the 80,000 acre onshore Ofoubou block in Gabon. Oxy will earn a 50% interest by funding the block's first wildcat, which spudded Jan. 17. The Ofoubou block is in an area that holds 15 fields with combined ultimate recovery of about 1.8 billion bbl of oil. Current production is about 150,000 b/d. The 600 million Rabi-Kounga field lies about 14 miles west of the block.

PETRO-CANADA, Calgary, Murrey b-50-H/93-1-14 wildcat in Grizzly Valley, 93 miles south of Fort St. John, B.C., flowed 40 MMcfd from a net 130 ft pay in Triassic Baldonnel above 7,157 ft. Estimated reserves are 35 bcf. Delineation drilling is planned, with hookup scheduled in 1994 when an area gas processing plant will be expanded. Petro-Canada has a 50% interest, Phillips Petroleum Resources Ltd. 25%, Amoco Canada Ltd. 18.75%, Encor Inc. 3.5%, and Texaco Canada Petroleum Inc. 2.8%.

ARCO BRITISH LTD.'S 44/18-1 wildcat on the lightly explored northern edge of the U.K. North Sea's southern basin, north of the Murdoch-Caister development area, flowed 54 MMcfd of gas through a 56/64 in. choke from upper Carboniferous sands. Total depth is 14,909 ft. ARCO holds a 60% interest in the block, Clyde Expro plc 25%, and Goal Petroleum plc 15%.

HAMILTON OIL (ALBANIA) CORP. acquired a 100% interest in the 700,000 acre Block 5 in the Ionian Sea off Albania and plans to start seismic surveys this year. The company signed a production sharing contract with the Albanian General Directorate of Oil and Gas that is divided into elective subperiods and associated work commitments. Hamilton will decide on the next phase of the contract after completing seismic work.

PIPELINES

ENSERCH CORP., Dallas, and Tejas Gas Corp., Houston, formed Gulf Coast Natural Gas Co., a 50-50 general partnership. Enserch conveyed all assets of its Enserch Gas Transmission Co. unit to the partnership and will receive $19.4 million during the next 12 months. Tejas is managing partner and operator of the 580 mile system that extends from Bee County, Tex., to the Katy hub near Houston. It will be connected to Tejas' South Texas network.

TRANSCONTINENTAL GAS PIPE LINE CORP. (TGPL), Houston, will appeal a Federal Energy Regulatory Commission final rule on its transition cost proceeding that would prevent the company from recovering $76 million of gas costs and $23 million interest. TGPL said the company and its affiliates in 1985-86 were entitled to pass through to customers transition costs incurred by resolving take or pay contract issues and increasing customer access to market responsive gas supplies.

DRILLING-PRODUCTION

ALCORN INTERNATIONAL INC., Houston, A-2 West Linapacan off Palawan Island, Philippines, flowed at a combined rate of 10,033 b/d through a 56/64 in. choke during third and fourth drillstem tests of Miocene Galoc limestone below 6,000 ft (OGJ, Jan. 20, p. 22). Combined maximum flow rate for DSTs 1-4 exceeded 26,000 b/d. Alcorn plans to deepen the discovery well (OGJ, Nov. 4, 1991, p. 47) to determine the oil/water contact then spud the A-3 West Linapacan delineation well.

GERRITY OIL & GAS CORP., Denver, began a 250 well drilling program, to be complete by yearend, in Wattenberg field in Colorado's Denver-Julesburg basin targeting Cretaceous Codell, Sussex, and J Sand. Gerrity plans to keep six rigs working through yearend.

RUSSIA'S Tomskneftegazgeologia and local officials of the Tomsk region reached informal agreement with Inter Maritimo Management FA (IMM), a Swiss-Anglo-American group, to set up a joint venture to develop six oil fields in the Kargasok district near Tomsk, Moscow's Financial & Business News reported. Plans call for Tomsk to spend about 250 million rubles on the project and IMM about $15 million. The contract could be signed this month or next.

INTERNAL REVENUE SERVICE issued temporary rules governing certification of U.S. enhanced oil recovery projects. The 1990 Budget Reconciliation Act allows a 15% credit for EOR costs if oil prices are lower than $28/bbl. IRS plans an Apr. 7 hearing in Washington on the regulations.

MUNICIPAL GAS AUTHORITY OF GEORGIA (MGAG) bought an overriding royalty interest in producing gas reserves in the Gulf of Mexico from Shell Offshore Inc. for $56.6 million. Shell Gas Trading Co. agreed to supply firm transportation of MGAG's volumes into the interstate pipeline systems of Transcontinental Gas Pipe Line Corp. and Southern Natural Gas Co. MGAG now has interests in 100 bcf of gas reserves and deliverability of about 50 MMcfd the next 56 years.

BERRY PETROLEUM CO., Taft, Calif., acquired interests in certain California oil and gas assets of ARCO Oil & Gas Co., including several leases in Midway-Sunset field, Kern County, and ARCO's 50% interest in Rincon field, Ventura County. Berry will receive $2.9 million for relieving ARCO of future commitments in Rincon field, jointly owned by the two. Production is about 1,800 b/d from the Midway-Sunset field leases and about 600 b/d from Rincon field.

CNG

CONOCO INC. and Mobile Gas Service Corp. early this year will begin a cooperative effort to sell compressed natural gas as a motor fuel in the Mobile, Ala., area. The two will install compressors and fueling equipment at Conoco retail outlets to serve fleet and individual CNG fueled vehicles. Mobile Gas has been using CNG in its fleet for more than a decade and is helping customers convert fleet vehicles.

NJ TRANSIT and Public Service Electric & Gas Co. (PSE&G) introduced the first buses in New Jersey powered by CNG. The five vehicles were placed in service in Essex County as part of a $2 million, 2 year pilot program funded by the federal Urban Mass Transportation Administration and PSE&G. The buses will refuel at a PSE&G CNG station.