INDUSTRY BRIEFS

SPILLS

A FEDERAL ARBITRATOR ruled Exxon Corp. and Alyeska Pipeline Service Co. must turn over full transcripts of conversations recorded the night of the Mar. 24, 1989, oil spill by the Exxon Valdez tanker. Magistrate David Ruskin was appointed by a federal court to decide what evidence is allowable in hundreds of spill related lawsuits. State and federal governments settled damage claims with Exxon for more than $1 billion last year (OGJ, Mar. 25, 1991, Newsletter).

U.S. COAST GUARD will support a model Spill Response Plan developed by the International Association of Independent Tanker Owners, International Chamber of Shipping, and Norwegian Shipowners Association. The model plan, which reflects the format of Coast Guard guidelines issued earlier, will help shipowners meet the Feb. 18 deadline for filing vessel response plans under requirements of the U.S. Oil Pollution Act of 1990.

TANKERS

SAGA PETROLEUM AS agreed to a 15 year lease with a 10 year option with Knutsen O.A.S. Shipping, Haugesund, Norway, for two shuttle tankers. The MT Tordis Knutsen was launched at the end of October at Bilbao, and an unnnamed sister vessel is due for launch in 1994. Each has design capacity of 850,000 bbl of oil. In addition to Saga's needs, the tankers will carry buoy-loaded oil for Norsk Hydro AS and oil from Staffjord field under a short term agreement with Den norske stats oljeselskap AS.

GAS PROCESSING

CGGS CANADIAN GAS GATHERING SYSTEMS INC., managed by Morrison Petroleums Ltd., Calgary, acquired a 62% interest in the Nevis gas processing plant and associated facilities from Gulf Canada Resources Ltd. for $34.1 million (Canadian). The plant, 56 km east of Red Deer, Alta., has a design capacity of 124 MMcfd of inlet gas which it can custom process into sales gas, propane, butane, condensate, and sulfur. Gulf will retain a 38% interest in the plant. Starting in first quarter 1993, Morrison will operate the plant for CGGS.

DRILLING-PRODUCTION

SHELL U.K. EXPLORATION & PRODUCTION received approval from the U.K. Department of Trade and Industry for two phase development of Galleon gas field in the U.K. North Sea. Phase 1, to cost 9300 million, will include a 15 slot wellhead platform. Production is to start late in 1994. British Gas plc agreed to buy first phase gas. Phase 2 includes a second satellite wellhead platform, the timing of which depends on further field delineation. Galleon reserves are pegged at 1.4 tcf of gas.

ASIAN DEVELOPMENT BANK approved a $600,000 loan to assist China's East Offshore Oil Co. (EOOC) and the Shanghai Public Utilities Administration Bureau in feasibility studies for utilizing oil and gas from Ping Hu field, 370 km east of Shanghai. EOOC plans to hire six international consultants to conduct the study, which it expects will take 21 man-months to complete. Field development may start early next year (OGJ, July 20, p. 128).

TEXACO INC. signed a letter of intent for Oceaneering International Services Ltd., Houston, to serve as prime contractor for extended well testing on Texaco's 100% owned Captain prospect in the North Sea. The contract is valued at more than $15 million. Oceaneering will hire a drilling rig and required services to drill three wells, one of them a horizontal hole. Drilling is to begin in January, with extended well testing to be complete by September 1993.

INDIA'S Oil & Natural Gas Commission (ONGC) let a $103 million contract to Essar Group, a private Indian company, for Bombay High platform work related to ONGC's efforts to end gas flaring off India. The project calls for platform modifications and subsea pipelines needed to process and transport associated gas and increase crude production. Funded by World Bank, the project is to be complete by 1994.

ALCORN INTERNATIONAL INC., Houston, last week was preparing to shut down West Linapacan oil field off Philippines Nov. 25-27 to repair a leaking flow line to one of the field's three wells. The Philippine government approved a $1.47 million repair project. Production from the first two wells earlier this month was 11,000-12,000 b/d. When repairs are complete and all three wells are on line, production is expected to return to 15,000-17,500 b/d (OGJ, Sept. 21, p. 36).

WASHINGTON ENERGY EXPLORATION INC., Seattle, HarCor Energy Co., Los Angeles, and JMI Services Nevada Inc., Houston, formed a partnership that bought 43 producing wells from Sun Operating LP for $13.5 million. Washington Energy holds 49.5% interest in the partnership and is operator of the wells, which are in 10 fields in South Texas and have proved reserves of about 350,000 bbl of oil and 17.7 bcf of gas. Meantime, an investor committed $10 million to fund Washington Energy's costs to drill about 15 development wells in Southwest Wyoming, allowing the company to step up its Section 29 tax credit drilling program.

CONOCO NORWAY INC. let a 600 million kroner ($96 million) contract to Aker AS, Oslo, for the wellhead module for the Heidrun platform to be installed off Central Norway. Fabrication of the 8,100 ton module will begin next month for delivery in July 1994.

REFINING

KUWAIT let a $51 million contract to China Oil Co. (COC) to repair its 370,000 b/d Al-Ahmadi refinery, damaged during the Iraqi occupation. COC said repairs are to be complete in 9 months.

U.S. ENVIRONMENTAL PROTECTION AGENCY issued a complaint to Amerada Hess Corp. charging it with violations of Clean Air Act emissions monitoring and reporting requirements, failure to submit related reports in a timely manner, and failure to install a hydrogen sulfide continuous emission monitor at its Woodbridge, N.J., refinery.

KERR-MCGEE CORP. licensed the residuum oil supercritical extraction (ROSE) process to Chevron Research & Technology Co. to convert the solvent deasphalting unit at Chevron's Richmond, Calif., refinery to the ROSE process. Conversion of the 50,000 b/sd unit is to be complete in second quarter 1994, substantially increasing the refinery's motor fuel production.

NIGERIAN NATIONAL PETROLEUM CORP. (NNPC) closed the 125,000 b/d Warri refinery Nov. 18 to prevent vandalism after workers started an indefinite strike for increased pay. NNPC directed products from the 150,000 b/d Port Harcourt refinery to be routed to areas affected by the strike. With the 110,000 b/d Kaduna refinery shut down for maintenance, only half of Nigeria's products demand of 300,000 b/d is being met.

EXPLORATION

KHANTY-MANSIYSK NATIONAL AREA administration and Russia's Geological Committee will offer for foreign participation the rights to further exploration and development in certain Ob River area oil and gas fields. An introductory presentation will be conducted in Khanty-Mansiysk in January that will provide prospective bidders with geological and geophysical data on the area.

ANADARKO PETROLEUM CORP., Houston, is negotiating a $27 million agreement to explore for and develop oil on the 2 million acre Rajasthan Block RJ-ON-90/1 north of the Cambay basin in India. The company will hold a 661/3% working interest in a 7 year work program that includes an initial 2 year seismic option phase followed by drilling phases. The block is one of 72 offered during India's fourth bidding round held last April. Partners include South Korea's Lucky-Goldstar International Corp. and Kyung In Energy Co.

ONGC drilled three discoveries off western India, two in the Gulf of Cambay north of the Bombay High area. The Gulf D wildcat flowed 1,443 b/d of oil and 2 MMcfd of gas through a 10 mm choke from pay at 1,40509 m. Gulf A flowed 1,371 b/d of oil and 1.5 MMcfd of gas through a 1/2 in. choke from 1,269-73 m. In the Bombay offshore area, ONGC's C-23 wildcat flowed 7.1 MMcfd of gas and 96 b/d of condensate from 2,445-2,547 m.

UTAH DIVISION OF STATE LANDS AND FORESTRY will conduct a public meeting Dec. 3 in Salt Lake City to receive comments on a proposal to lease about 8,000 acres of school trust lands in the Sevenmile and Cane Creek areas of San Juan and Grand counties near Moab for oil and gas exploration and development. The State Lands and Forestry board authorized the offering provided certain procedures are met. About 12,000 acres of trust lands were withdrawn from leasing in 1961 to encourage potash development, and last year the division lifted the withdrawal on about 4,000 acres.

SPR

U.S. DEPARTMENT OF ENERGY chose, subject to final negotiations, DynMcDermoff Petroleum Operations Co., New Orleans, to manage and operate the Strategic Petroleum Reserve (SPR). The 5 year cost plus fee contract is valued at about $630 million and is expected to begin in April. The current operator is Boeing Petroleum Services Inc., whose 8 year tenure will end Mar. 31, 1993. The SPR holds more than 570 million bbl of crude in salt caverns along the Texas and Louisiana Gulf Coast.

COMPANIES

ENGELHARD CORP., Iselin, N.J., and Procatalyse, Rueil-Malmaison, France, will combine catalyst lines and cooperate in sales and service of a single product line worldwide. In North America, the two formed a 50-50 venture, Acreon Catalysts, that will serve the market for hydroprocessing catalysts. Acreon will be based in Houston and start operations in January 1993. Procatalyse has the exclusive right to market and sell the full product line outside North America.

PETROCHEMICALS

IMPERIAL CHEMICAL INDUSTRIES commissioned its new $315 million, 350,000 metric ton/year purified terephthalic acid plant at Kuanyin, Taiwan. Construction began in January 1990 and was complete in June, with test production beginning in August. When the plant reaches full production in 1993, Taiwan's PTA output is expected to jump to 1.4-1.8 million tons/year.

ENTERPRISE PRODUCTS CO., Houston, commissioned its third UOP Butamer process unit for butane isomerization at Mont Belvieu, Tex. The plant has a rated capacity of 30,000 b/d of high purity isobutane and will supply feedstock for alkylate and methyl tertiary butyl ether production.

PIPELINES

MALAYSIA'S PETRONAS completed right-of-way acquisition and related studies for two of the five Malaysian states involved in the 530 km Peninsular Gas Utilization (PGU) III pipeline project. Preliminary work is complete for PGU III pipelaying in Perak and Selangor states and is continuing for Perlis, Kedah, and Penang states. Petronas Gas (PG) soon will begin detailed engineering studies for the system extending from Klang, Selangor, to Bukit Kteri, Perlis, with laterals to Bukit Kayu Hitan and Yan in Kedah, Prai in Penang, and Lumut in Perak. PG called for prequalifying on a tender to supply, deliver, coat, and store line pipe for the project.

UTILICORP UNITED, Kansas City, Mo., plans to purchase the Nebraska gas distribution system of Arkla Inc.'s Minnegasco division for about $78 million. The system serves about 124,000 customers in eastern Nebraska and will be merged with UtiliCorp's Peoples Natural Gas division, increasing its number of Nebraska customers to 161,000. The deal is to be complete in first quarter 1993,

JOINT PIPELINE OFFICE, consisting of Alaska's Department of Natural Resources, U.S. Office of Pipeline Safety, and U.S. Bureau of Land Management, ordered Alyeska Pipeline Service Co. to improve corrosion protection monitoring procedures along the Trans-Alaska pipeline. The action is the result of a 2 year study of the company's procedures. Alyeska is required within 3 months to submit a schedule outlining a plan of action.

MATRIX PARTNERS INC., Houston, acquired the 315 mile Bayou South Gas Gathering Co. from Arkla Energy Resources, including a network of 10 gas gathering pipeline systems in Louisiana and five in East Texas. South Bayou delivers about 50 MMcfd of gas from more than 150 wells.

JOHN BROWN E&C'S office in Tulsa, not in Houston as reported incorrectly, will manage, design, engineer, and construct three 1,100 hp reciprocal two stage gas pipeline compressors for an expansion at Trident NGL Inc.'s Ginger gas processing plant near Canton, Tex. Trident NGL is based in The Woodlands, Tex., not in Dallas, as reported (OGJ, Oct. 19, p. 40).

COGENERATION

DESTEC ENERGY INC., Houston, agreed with Kalama Chemical Inc. to develop a natural gas fired 220,000 kw cogeneration plant in Kalama, Wash. Destec will develop, build, own, and operate the plant, which will supply steam and process heat for Kalama Chemical's manufacturing process. Electrical power is to be sold to utilities in the Pacific Northwest.

EXPORT & IMPORTS

TAIWAN'S state owned Chinese Petroleum Corp. agreed to purchase 180,000 metric tons/year of liquefied petroleum gas from Saudia Arabia. Previously, CPC had tried for several years to buy Saudi LPG without success because of limited supplies.