INDUSTRY BRIEFS

COGENERATION

TENNECO COGENERATION DEVELOPMENT CO., a unit of Tenneco Power Generation, Houston, will build a gas fired cogeneration plant to supply electricity, water, and steam to Texas A&M University, College Station, Tex. The plant, to be built in two phases, will produce about 85,000 kw of power. Phase 1 will come on line by third quarter 1994, Phase 2 a year later. Brown & Root Inc., Houston, will provide technical support for the project.

TRANSCANADA PIPELINES LTD., Calgary, plans to participate in a proposed $200 million power cogeneration plant near Hermiston in Northeast Oregon. Others in the 230,000 kw, natural gas fueled plant are Ida-West Energy Co. and Power Management Corp. Preliminary work on the plant started in 1992 with construction tentatively scheduled for 1995. The Bonneville Power Administration chose the Hermiston project as one of three to provide as much as 800,000 kw of power.

DRILLING-PRODUCTION

DEVON ENERGY CORP., Oklahoma Co, agreed to buy gas leases in the North Central part of Northwest New Mexico's San Juan basin from FINA Inc., Dallas, for $54 million. The purchase will add 75 bcf, or 25%, to Devon's proved gas reserves. Purchased assets are in the Fruitland coal formation. Gas from 64 producing wells qualifies for Section 29 federal income tax credits. Closing is scheduled June 28.

NABORS INDUSTRIES INC., Houston, completed its $32 million purchase of 167 land drilling rigs and other assets of Grace Drilling Co., Dallas (OGJ, May 3, p. 44). The Grace rigs will be merged with Nabors' Lower 48 U.S. fleet of 40 rigs operated by Nabors Loffland Drilling Co., Houston, which has been renamed Nabors Drilling USA Inc. Terms give Grace a 3 year warrant to buy 1.1 million common shares of Nabors common stock for $16.18/share.

EBCO U.S.A. INC. on behalf of several producers will auction 300 U.S. oil and gas leases in Texas, Oklahoma, New Mexico, Louisiana, Kansas, Arkansas, California, Michigan, Mississippi, Montana, and Wyoming. The sale is scheduled July 8 in Dallas at Southland Center Hotel.

VAALCO ENERGY INC., Houston, completed its A-3 West Linapacan sidetrack in 1,100 ft of water off Palawan Island, Philippines. New bottom hole location is 1/2 mile southwest of the original completion. The well produced at a stabilized rate of 5,750 b/d of oil including 14% bs&w through a 11/64 in. choke.

POGO PRODUCING CO., Houston, drilled two wells from its Eugene Island Block 330 Platform C in the Gulf of Mexico. Its C-7ST 2 is the field's first horizontal development well, cutting 535 net ft of pay in two lobes of the GA-2 zone. Production will begin soon. Earlier, its conventional C-10ST 2 well flowed 710 b/d of oil through a 20/64 in. choke with 620 psi flowing tubing pressure. It cut 80 net ft of HB sand. Another development well is to be drilled soon. Pogo holds a 35% working interest in the field.

PHILLIPS PETROLEUM CO. U.K. LTD. let a 55 million ($83 million) contract to AMEC Offshore Ltd., Wallsend, U.K., to fabricate platform topsides for Judey field in North Sea Block 30/7a. The 9,800 metric ton unit, to house a crew of 50, is scheduled for installation in mid-1995. Project partners are operator Phillips 36.5%, Agip (U.K.) Ltd. 33%, and British Gas Exploration & Production Ltd. 30.5%.

PHILLIPS PETROLEUM CO. FAR EAST let a $15 million contract to a joint venture of AMEC plc, London, and Chinese Offshore Industrial Corp. to build two accommodation modules for development of Xijiang field in the South China Sea. The two 1,250 metric ton modules will be built at Dalian New Shipyard in Liaoning province, with completion in April 1994 and March 1995.

PAKISTAN'S Oil & Gas Development Corp. (OGDC) was to start production of 3,000 b/d and 25 MMcfd this month from Sakdal oil and gas field in the Margalla Hills area, 45 km south of Islamabad. Pay depth in the two well field is 4,500 m. Crude will move to the Attock refinery and gas via the Sui Northern Gas Pipeline after installation of a dehydration plant. The field will boost OGDC oil production to its target of 32,700 b/d and Pakistan's total to 70,000 b/d, compared with national oil consumption of 230,000 b/d.

REFINING

TOTAL purchased for an undisclosed price British Petroleum Co. plc's lube blending plant at Mulheim am Ruhr, Germany, as part of its strategy of further penetrating the German lube oil market. Base lube feedstock will come from Total's Gonfreville, France, refinery. Finished lubes from Total's lube blending plants in France also will be stored at Mulheim.

SHELL U.K. LTD. let a 15 million ($23 million) contract to Costain Engineering & Construction Ltd., London, to revamp a gasoil hydrodesulfurizer at its 262,000 b/d Stanlow, U.K., refinery. Costain will complete detailed engineering, procurement, and construction work by September 1994.

EXPORTS-IMPORTS

INDIA secured almost half of its total oil import needs for fiscal 1993-94, projected to be flat with last year's level of 578,000 b/d. State owned Indian Oil Corp. completed contracts for 290,000 b/d from five countries: Saudi Arabia 100,000 b/d, Kuwait 80,000 b/d, Iran 60,000 b/d, Abu Dhabi 40,000 b/d, and Malaysia 10,000 b/d.

GOVERNMENT

BANGLADESH adopted a policy to encourage foreign investment in its oil and gas sector, Prime Minister Khaleda Zia said foreign oil and gas investors will be allowed duty free imports of equipment and supplies and no longer will be required to pay a production sharing agreement fee. The government also fixed the price of gas at 75% of world market fuel oil prices.

PETROCHEMICALS

ETHYLENE MALAYSIA SDN. BHD. let a turnkey contract to Toyo Engineering Corp. and ABB Lummus Crest Inc. for a 320,000 metric ton/year grassroots ethylene plant to be built at Kertih, Terengganu, Malaysia. The ethane based plant will use Lummus Crest's short residence time ethylene technology to supply feedstock for an adjacent polyethylene plant. The project is a joint venture of Petroliam Nasional Bhd. 60%, Idemitsu Petrochemical Co. Ltd. 25%, and BP Chemicals Ltd. 15%. Start-up is scheduled for 1996. John Brown Projects (Malaysia) is management consultant.

TEXACO CHEMICAL CO. let contract to Foxboro Co., a division of Siebe plc, to provide I/A Series automation systems, intelligent field instrumentation, and project engineering services for a $400 million facility under construction at Texaco's Port Neches, Tex., chemical complex. Foxboro's portion of the project is valued at more than $8 million. The new plant will produce 400 million lb/year of propylene oxide and 1,300 million lb/year of MTBE using a proprietary Texaco process.

GAS PROCESSING

PAKISTAN'S OGDC let contract to Australia's Clough Engineering to design, build, and commission a gas/condensate processing plant in Dhodak gas field at a cost of $75 million. It is to be located 20 km north of Taunsa, Dera Ghazi Khan district, Punjab. The plant, scheduled for completion in August 1994, will produce liquefied petroleum gas and other products.

ENVIRONMENT

LOUISIANA'S Department of Environmental Quality (DEQ) issued a permit to Campbell Wells Corp., a unit of Sanifill Inc., Houston, to operate a treatment plant for nonhazardous oil field waste (NOW) containing as much as 200 picocuries/g of naturally occurring radioactive material (NORM). The permit is subject to an appeal process. Campbell Wells plans to build the NOW-NORM plant near Lacassine, La. Louisiana has an estimated 20,000-30,000 NORM contaminated sites.

LOUISIANA LEGISLATORS passed an oil field site restoration bill that establishes a fund of as much as $10 million to plug orphaned wells and restore other oil field sites when a responsible operator can't be found. Revenue for the fund is to be raised by a 1cts/bbl fee on oil produced in the state and a 0.2cts/Mcf fee on gas. HB 2038 also creates a voluntary program in which a site specific restoration account can be set up for each Louisiana well that would remain with the well if it is sold to other interests.

PIPELINES

BECHTEL CORP., San Francisco, and Interprovincial Pipe Line Inc., Edmonton, teamed to pursue international pipeline construction. They agreed to develop, lay, own, and operate a series of projects. Terms call for Bechtel to evaluate and engineer the systems, providing financing services and implementing selected projects by providing procurement, construction, and start-up. Interprovincial will participate in equity, financing, ownership, and operation of the systems.

GAS DELIVERIES RESUMED June 13 via Russia's Progress Pipeline in the Mordovia region southeast of Moscow. It and two other lines were shut down June 7 because of an explosion and fire (OGJ, June 14, p. 26) apparently caused by leaking gas at a gauge assembly, according to a government commission investigating the accident.

COMPANIES

FIRST MISSISSIPPI CORP., Jackson, Miss., agreed in principle to sell oil and gas reserves of subsidiary First Energy Corp., Houston, to JN Exploration & Production LP, Billings, Mont., for $52 million. The sale aids the company's effort to focus on chemicals, fertilizer, and environmentally driven technology businesses. Closing is expected before June 30.

AMOCO CANADA LTD., Calgary, tentatively agreed to sell 1.75 million net acres of leases in Alberta, British Columbia, and Saskatchewan. A letter of intent was signed with at least two unidentified buyers for the acreage, which is about 14% of the original combined assets of Amoco and the former Dome Petroleum Ltd., which Amoco acquired.

ASHLAND OIL INC. and subsidiary APAC-Holdings Inc. agreed in principle to sell their APAC-Arizona Inc. highway construction unit to Kiewit Construction Group Inc., a unit of Peter Kiewit Sons' Inc., Omaha. Terms, subject to several conditions, are not disclosed. The deal will complete Ashland's program to divest assets valued at $200 million, with the funds to be used to reduce debt.

EXPLORATION

STATESIDE ENERGY CORP., Vancouver, B.C., signed a farmout agreement with Conoco Canada Ltd. and Dynamic Oil Ltd. to drill two deep wildcats in British Columbia's Fraser Valley. Terms call for Stateside to pay as much as $3.2 million (Canadian) as its share of drilling costs on the 10,500 ft Campbell River and 10,000 ft Murray Creek wells to earn a 20.83% interest in the 13,802 acre block. Conoco retains a 50% interest, Dynamic 29.17% after paying 16.67% of drilling costs.

PANCANADIAN PETROLEUM LTD. and Canadian Occidental Petroleum Ltd.. both of Calgary, signed a $16 million (U.S.) production sharing agreement in Indonesia. The deal covers a 7,723 sq mile area with oil prospects on Kalimantan. The companies will be required to shoot 311 miles of seismic surveys and drill at least one well during a 6 year program. Operator CanOxy holds a 60% interest, PanCanadian unit PanCanadian Petroleum (Sintang) Ltd. 40%.

KUFPEC AUSTRALIA PTY. LTD., Perth, tested 1,840 b/d of 42 gravity oil at its 1 Nebo off Western Australia. Although the find is deemed uncommercial, Wood Mackenzie Consultants Ltd., Edinburgh, said this is the first oil find in the Beagle subbasin, extending the Carnarvon basin's productivity 100 km northeast.

TRANSPORTATION

NEW YORK MERCANTILE EXCHANGE designated Plains Resources Inc. unit Plains Terminal & Transfer Corp. as an approved delivery site for crude delivered under the Nymex light, sweet crude futures contract. Certification becomes effective July 1, and Nymex contract deliveries after then may be designated at Plains' Cushing, Okla., site. Plains recently placed six 100,000 bbl storage tanks into service and has established deliveries through ARCO Pipe Line Co.'s Cushing interchange. Plains expects to place 12 more storage tanks with 1.4 million bbl combined capacity in service by September.

ESTONIAN TRANSOIL AS, a unit of Neste Corp., officially opened an oil terminal in Muuga Harbor, Tallinn, Estonia, to receive and distribute petroleum products from Neste refineries in Finland. Terminal facilities include eight storage tanks with combined capacity of 4,000 cu m, a road tanker loading point, pumping plant, and warehouse. Since beginning operations last April, the installation has supplied Estonia 5,000 metric tons of gasoline.

SPILLS

OIL FLOW RESTARTED June 2 from the Bombay High North platform off western India after repairs to the main pipeline to shore at the Uran terminal were complete. The pipeline riser linked to the platform ruptured May 17, resulting in a large spill of undetermined volume and cutting field production to 60,000 b/d from 280,000 b/d. India's coast guard broke up the spill with dispersants. India's Environment and Forests Ministry charged operator Oil & Gas Commission with neglecting safety standards, citing undetected corrosion in the pipeline.

Copyright 1993 Oil & Gas Journal. All Rights Reserved.