INDUSTRY BRIEFS

WASTE RECOVERY

NEW MEXICO'S Energy, Minerals, & Natural Resources Department's oil conservation division agreed to let Controlled Recovery Inc. (CRI), a unit of TransAmerican Waste Industries Inc., Houston, build storage tanks and equipment for a 200.000 bbl/year oil field waste treatment unit at a landfill near Hobbs, N.M. CRI expects to recover 100,000 bbl/year of pipeline grade crude oil, along with crystalline waxes, fuel oil, asphalt, and road mix material from storage tank bottoms and sludge recovered from oil field containment structures. Work is to begin now.

TERMINALS

ESTONIAN TRANSOIL AS opened the first of a planned series of oil terminals for the Estonian port of Tallinn. In its first stage, the terminal consists of eight storage tanks, a road tanker loading point, and a pumping plant. It can handle 60,000 metric tons/year of seaborne imports of gasoline and diesel oil and will be expanded in a second phase to be completed by spring 1994. Estonian Transoil is a joint venture of Finland's Neste Corp. and Estonian energy company Eesti Kutus. Neste set up the venture in 1991 to provide product storage and services in Estonia.

ARAMCO OVERSEAS CO. (AOC), a unit of Saudi Arabian Oil Co., agreed to buy a 34.35% interest in the Texaco/Esso Maatschap (TEM) crude oil terminal at Rotterdam, Netherlands, from Texaco Raffinaderij Permis BV (TRP). The deal involves transfer of TRP employees to a new company formed to operate the terminal. TEM, with storage capacity of 17 million bbl. handles crude oil for Esso refineries in Rotterdam and Antwerp. In addition to AOC's interest in TEM, Esso Nederland By owns 42.85% and TRP retains 22.8% interest in the facility.

PIPELINES

NORTHWEST PIPELINE CORP., Salt Lake City, Utah, filed for a permit from the U.S. Federal Energy Regulatory Commission to expand its main line gas transmission system by 263.5 MMcfd. The proposed System Expansion II is in response to customer requests received during an open season that ended last Jan. 15. System Expansion II will carry Canadian and U.S. gas and increase Northwest Pipeline's total capacity 10% to 2.85 bcfd.

FERC ruled Columbia Gas Transmission Corp. may not recover costs associated with bankruptcy proceedings in its rate restructuring under Order 636 but may do so through its gas inventory charge mechanism. FERC said Columbia, under a settlement with its customers, agreed to use its gas inventory charge as the sole means through which it will recover costs related to its gas supply inventory.

FERC proposed a rule setting standards for electronic bulletin boards operated by interstate natural gas pipelines. The standards, which follow recommendations by industry advisory groups, would be effective Apr. 1, 1994. FERC staff, working on remaining unresolved issues, is to report to the commission by Feb. 1, 1994.

KOCH GATEWAY PIPELINE CO., formerly United Gas Pipe Line Co. (UGPL) and now a unit of Koch Industries Inc., Wichita, is near completion of a tie-in to Exxon Co. U.S.A.'s Mobile Bay gas processing plant in Alabama and is preparing to hook up with the Henry hub facilities of Sabine Pipe Line Co., Houston. Koch Gateway will consider other capital projects linking its interstate gas pipeline system to developing U.S. gas basins. Koch renamed United Gas Services, acquired along with UGPL in fourth quarter 1992, Koch Gas Services Co.

CANADA'S National Energy Board decided that restrictions on operating conditions are not a practical solution to problems caused by the form of stress corrosion cracking (SCC) found in Canadian pipelines. NEB reached that conclusion after an inquiry into pipeline SCC. The December 1992 inquiry responded to recommendations from the Transportation Safety Board (TSB) of Canada stemming from NEB's decision to reassess TransCanada PipeLines's system maintenance program. The TSB recommendations were in response to three breaks on TransCanada's gas transmission system, all of which occurred in Ontario.

IRAQ'S Oil Projects Co. started up a $20 million, 25 km products pipeline linking Baghdad with storage tanks in the eastern province of Dialalh. Iraq plans eventually to hook all its reservoirs into a pipeline network. Most products currently move via truck to regional storage depots.

SAUDI ARABIAN OIL CO. let contract to National Petroleum Construction Co. (NPCC) of Abu Dhabi and affiliate Zamil-NPCC for offshore pipeline and related construction. Work will include installation of 26 offshore pipelines with a combined length of 93 km, as well as risers and tie-ins. It is to be complete by November 1994.

COGENERATION

DESTEC ENERGY INC., Houston, and MCN Corp., Detroit, plan to build, own, and operate a $150 million, 123,000 kw cogeneration plant in Ludington, Mich. The plant will sell electricity to Consumers Power Co. and steam to Dow Chemical Co.'s Ludington plant, One MCN unit will supply the plant 9 bcf/year of gas under long term contract, and another, Michigan Consolidated Gas Co., will spend $20 million to build a pipeline and other facilities to move gas to the new plant, which will be next to Dow's facility. Operation is scheduled for 1996 start-up.

DESTEC and New Jersey Resources Corp. unit New Jersey Natural Gas Co. agreed to a 20 year deal to supply gas to the Northway cogeneration plant at Harriman, N.Y. Terms call for 4 bcf/year for Northway, which is designed to produce 57,000 kw of electrical power for Orange & Rockland Utilities Inc. and thermal energy for industrial processing for the adjacent Nepera Inc. plant in Harriman. Northway is a joint project of Destec and Paradigm Power Inc., another unit of New Jersey Resources.

TANKERS

CHEVRON SHIPPING CO. christened its 136,000 dwt Condoleezza Rice double hull tanker Aug. 23 at the Ishikawajima do Brasil Estaleiros SA shipyard in Rio de Janeiro. The new unit brings Chevron's world fleet to 40 tankers, 10 of them with double hulls.

GAS PROCESSING

AMOCO CANADA PETROLEUM CO LTD. and PanCanadian Petroleum Ltd. asked Alberta's Energy Resources Conservation Board for permission for each to add 800 MMcfd of gas liquids processing capacity in the Empress, Alta., area. Amoco wants to expand its plant there to 2.3 bcfd from 1.5 bcfd. PanCanadian, co-owner of the Amoco operated facility, wants to build a plant there with 800 MMcfd initial capacity.

SUNCOR INC. RESOURCES GROUP, Calgary, applied for regulatory approval to build a $10 million (Canadian) gas processing plant in Northwest Alberta. The Bear Canyon plant is to have capacity to handle 35 MMcfd of gas production from Suncor and other operators in the area. Suncor is to use 10 MMcfd of capacity.

REFINING

ASHLAND PETROLEUM CO. will spend $25 million to renovate and reactivate the solvent deasphalter at its 213,400 b/cd Catlettsburg, Ky., refinery. The 14,000 b/d processing unit, shut down since 1983, is expected to be back in operation in mid-1994. In addition, the refinery is starting up a $90 million, 40,000 b/d diesel desulfurizer and expects to start up a $75 million. 16,500 b/d continuous catalyst regenerator reformer in September.

DIAMOND SHAMROCK INC., San Antonio, started up a 30,000 b/d diesel desulfurizer at its McKee refinery in the Texas Panhandle. The unit allows the company to produce low sulfur diesel ahead of the U.S. Environmental Protection Agency's Oct. 1 deadline.

SHELL OIL CO. let contract to CDTech for licensing and basic engineering of a 16,000 b/sd CDHydro unit at its 215,000 b/cd Norco, La., refinery for selective hydrogenation of diolefins in butene feedstock. The process replaces fixed bed units with a single process step combining reaction and fractionation. Product streams will be used to produce methyl tertiary butyl ether, alkylate, and methyl ethyl ketone. Shell will convert a splitter column to use the new technology. This first CDHydro unit will be installed in 1994.

COMPANIES

SHELL CANADA LTD., Calgary, will cut $250 million (Canadian) in costs between now and 1995 through staff layoffs and other measures. Its business units are currently examining areas for cost reduction and revenue enhancement affecting operations and projects company-wide. Shell did not disclose details but said it does not plan asset sales. Twenty members of its exploration staff were laid off in July, and cuts of 20 support staff were scheduled. Shell cut its payroll to 5,593 by the end of 1992 from a 5 year peak of 7,219 at yearend 1989.

CO-ENERCO RESOURCES LTD., Calgary, agreed to pay Solex Energy Corp. $40 million (Canadian) for producing leases and associated facilities. four gas processing plants, and 59,000 net undeveloped acres in the Haro and Bover areas of northern Alberta. The leases, producing 10 MMcfd of gas, hold proved reserves of 77.4 bcf. Co-enerco will become operator of all the leases and have an average interest of 84%. Closing is on tap for Sept. 22.

MARATHON OIL U.K. LTD. joined forces with Scottish Hydro-Electric plc, Perth, to form Vector Gas Ltd., a 50-50 venture marketing gas to U.K. industrial and commercial users. Gas deliveries will begin in October to clients currently buying electricity from Hydro-Electric and to new customers.

DRILLING-PRODUCTION

NOBLE DRILLING CORP., Houston, agreed to buy nine jack up drilling rigs for an undisclosed price from Western Co. of North America, also of Houston. Closing is expected by Oct. 15. Noble also agreed to buy the Portal 201 and 202 submersible rigs and related equipment from Portal Rig Corp. for 656,410 shares of Noble common stock. The units, in the Gulf of Mexico, are idle. Closing is scheduled in September. The purchases bring Noble's offshore fleet to 19 jack ups, eight submersibles, four posted barges, and two platform rigs.

ARETHUSA (OFF-SHORE) LTD., Houston, paid $69 million for two third generation deepwater semisubmersible rigs, increasing to 10 its fleet of semis. Treasure Stawinner, working off Brazil, is to be renamed Arethusa Winner, and Treasure Staworker, under contract in the Gulf of Mexico, is to become Arethusa Worker. Arethusa said the purchase makes it the second largest semisubmersible drilling contractor in the gulf and the largest foreign semisubmersible contractor working off Brazil.

SHELL U.K. EXPLORATION & PRODUCTION recovered the wellhead from its P1 satellite well in Cormorant field on U.K. North Sea Block 211/26a. The wellhead was connected by a 4 km pipeline to the platform and produced 17.5 million bbl of oil and 7 bcf of gas during 11 years of service. The wellhead will be replaced by an extended reach well to be drilled from Cormorant Alpha platform during the fourth quarter.

OVERSEAS PRIVATE INVESTMENT CORP., Washington, D.C., agreed to guarantee for periods of up to 7 years as much as $9.2 million in loans to Argosy Energy International, a unit of Garnet Resources Corp., Houston, for development on Santana block in the Putumayo region of Colombia. Argosy will use funding backed by OPIC's guaranty, which is to be secured by Argosy's interest in the Santana block and related assets, to drill development wells in Toroyaco, Linda, Mary, and Miraflor fields and to lay pipelines and build production facilities needed to begin Mary and Miraflor field production.

CONOCO (U.K.) LTD.'S appraisal well 49/17-11 in North Sea Block 49-17, 90 miles east of Lincolnshire, U.K., flowed 58 MMcfd of gas and 84 b/d of condensate through a 104/64 in. choke from Rotliegendes pay. The Arch Rowan jack up rig drilled the well to 10,550 ft. Partners in addition to operator Conoco 20%, are Superior Oil (U.K.) Ltd. 25%, Total Oil Marine plc 15%, Statoil (U.K.) Ltd., British Borneo Petroleum Syndicate plc, and National Power plc 10% each, and Seafield Resources plc and Sovereign Oil & Gas plc 5% each.

GAS STORAGE

NATIONAL FUEL GAS SUPPLY CORP., Buffalo, and Natural Gas Clearinghouse (NGC), Houston, expect to begin operating Sept. 1 a market area pipeline hub in Pennsylvania for shippers moving gas in the U.S. Northeast. The Ellisburg-Leidy hub will offer gas balancing, wheeling, parking, and title transfer services through links with the interstate pipeline systems of Transco Energy Co., Tennessee Gas Pipeline, CNG Transmission Corp., Texas Eastern Transmission Corp., and Columbia Gas Transmission Corp. Plans include forming a partnership to manage gas flow through the hub, with NGC acting as hub administrator.

EXPLORATION

PANCANADIAN PETROLEUM LTD., Calgary, agreed with Ampolex Ltd., Sydney, to explore three blocks in the Browse basin off Western Australia. The exploration permit, which covers 11,806 sq miles, calls for at least 447 miles of seismic surveys and drilling of one well. Drilling is under way. Ampolex holds a 65% interest in the program, PanCanadian 25%, and Bridge Oil Ltd., Sydney, 10%.

ALTERNATE FUELS

POWERGEN PLC, a U.K. electrical power producer, after long trials won Pollution Inspectorate approval to run power stations at Ince, Cheshire, and Richborough, Kent, on Orimulsion fuel from Venezuela.-London's Financial Times said environmentalists denounce Orimulsion as the world's filthiest fuel.