INDUSTRY BRIEFS

ABU DHABI NATIONAL OIL CO. let a 5.5 billion markka ($1.045 billion) contract to Kvaerner Masa-Yards Inc., Helsinki, to build four liquefied natural gas carriers, each with 135,000 cu m capacity. The 68,500 dwt vessels will transport LNG to Japan from Abu Dhabi. Construction will take place in Kvaerner's Turku, Finland, shipyard, with delivery scheduled for 199697.

May 10, 1993

11 min read

LNG

GAS PROCESSING

CANADIAN GAS GATHERING SYSTEMS INC. (CGGS) signed a letter of intent to acquire Gulf Canada Resources Ltd.'s 38% interest in the Nevis gas processing plant and associated gathering, compression, and loading facilities in Alberta. The 124 MMcfd capacity plant is 56 km east of Red Deer, Alta. It increases CGGS' ownership in the plant to 1 00%. Closing is expected by June 30.

COMPANIES

POLAND'S Industry and Trade Ministry said four European companies and one U.S. company will invest $300 million during 5 years to privatize and modernize Poland's gas industry. The ministry identified them as BOC of Britain, Linde of Germany, AGH of Sweden, Hydrogas of Norway, and Liquid Carbonic of the U.S.

ANADARKO PETROLEUM CORP., Houston, will increase its 1993 capital spending budget to $290 million from $255 million. Outlays will go mainly for exploration and development in the U.S. Midcontinent, Gulf Coast, and Gulf of Mexico. Last year's capital spending was $360 million, including $206 million for purchase of leases.

GULF CANADA RESOURCES LTD., Calgary, and Olympia & York Developments Ltd., Toronto, sold their combined 60% controlling interest in Home Oil Ltd., Calgary, to a group of undisclosed brokerage firms and individual investors for $396 million (Canadian). The sale will net Gulf about $145 million, which it plans to use to reduce debt. Gulf is 70% owned by Olympia & York.

SUN CO.INC. accepted an offer from Canadian underwriters Burns Fry Ltd., Gordon Capital Corp., and R.B.C. Dominion Securities Inc. to buy 6,824,635 common shares of unit Suncor Inc., North York, Ont., for $27 (Canadian)/share. Gross.proceeds will amount to $184 million. The sale reduces Sun's ownership in Suncor to about 55% from 68%. Closing is expected this month.

NATIONSBANK TRUST OIL & GAS agreed to manage mineral interests on 7 million acres in the U.S. Lower 48 held by Pacific Enterprises, Los Angeles. It will negotiate oil and gas leases for Pacific Enterprises, the holding company for Southern California Gas Co.

BRITISH GAS PLC said the U.K. Monopolies and Mergers Commission inquiry into its future role, scheduled to report at the end of April, has until the end of July to reach a verdict (OGJ, Mar. 8, p. 26). "We recognize the need for more time due to the complexity and magnitude of the task involved," said British Gas Chairman Cedric Brown.

TOTAL CANADA OIL & GAS LTD., Calgary, changed its name to Rigel Energy Corp. Rigel is a star in the Orion constellation. Total Canada was a unit of Total SA, Paris, until Feb. 1 when the French company sold its 53% interest.

EXPLORATION

VAALCO ENERGY INC., Houston, West Linapacan B structure wildcat in 1,100 ft of water off Palawan Island, Philippines, flowed 2,840 b/d of 32.6 gravity oil and 6.5 MMcfd of gas through a 41/64 in. choke with 1,150 psi flowing tubing pressure from perforations at 7,990-8,010 and 8,020-40 ft in Linapacan limestone. GOR is 2,329:1. More tests and a confirmation well are planned before development begins.

GARNET RESOURCES CORP., Houston, and production association Tatneft signed a joint venture agreement for Garnet's Akseki, Egridir, and Isparta licenses in Southwest Turkey. The three blocks, with a combined 2.66 million acres, are in the Taurus Mountains, 30 miles north of the Mediterranean Sea coast at Antalya, Turkey. Tatneft this year will conduct a seismic survey and will have two successive options to drill wildcats. If both are drilled, Tatneft will earn a 65% interest in all licenses, and Garnet will retain 13.89% interest.

SANTA FE ENERGY RESOURCES INC., Houston, plans to start drilling in July the first of two delineation wells on the 1.1 million acre Chihuidos block, 600 miles southwest of Buenos Aires in Argentina's Neuquen basin. They come after a second test of Santa Fe's X-1 Sierra Chata wildcat flowed 10.9 MMcfd of gas and 75 b/d of condensate through a 1 in. choke with 1,765 psi bottom hole flowing pressure from a Mulichinco formation at 5,727-63 ft (OGJ, Apr. 19, Newsletter).

NIGERIAN NATIONAL PETROLEUM CORP. awarded production sharing contracts to Elf Nigeria Ltd., a unit of Ste. Nationale Elf Aquitaine, for three onshore blocks in the Benue basin and two blocks in 200-1,000 m of water in the Atlantic Ocean south of the OML 100 permit area where Elf Nigeria began producing oil in Afia and Odudu fields in March. Elf Nigeria is to pay exploration and development costs on the new tracts in return for undisclosed shares of oil production,

PIPELINES

EQUITABLE PIPELINE CO., a unit of Equitable Resources Inc., Pittsburgh, agreed to acquire Arkla Inc. unit Louisiana Intrastate Gas Corp. (LIG), Houston, for about $190 million cash. LIG owns a 1,900 mile, 1.5 bcfd capacity intrastate pipeline system in Louisiana and four gas processing plants. Closing is expected in 60 days, subject to regulatory approval and other requirements.

TEJAS GAS CORP., Houston, agreed to buy substantially all of Exxon Co. U.S.A.'s 2.5 bcfd capacity Texas and Louisiana intrastate gas pipeline Systems. Subject to conditions, Tejas will acquire all outstanding stock of Exxon Gas System Inc. (EGSI), Monterey Pipeline Co., Humble Gas Transmission Co., and Humble Gas System Inc. Tejas also will acquire West Clear Lake storage field near Houston. Closing is expected within 90 days. EGSI operates a 1,600 mile transmission system in Texas, and Monterey a 600 mile system in Louisiana.

CALIFORNIA PUBLIC UTILITIES COMMISSION exercised its jurisdiction over Mojave Pipeline Co.'s proposed gas pipeline extension into northern California. CPUC asked Mojave to file an application with the commission, a step that would begin a proceeding in which rates, service, and safety of the $466 million proposed pipeline could be discussed publicly. Mojave originally sought project approval only with the U.S. Federal Energy Regulatory Commission (OGJ, Mar. 22, p. 42).

TRANSCANADA PIPELINES LTD. agreed to acquire a 30% interest in the proposed 600 mile SunShine pipeline linking gas markets in central and western Florida with supplies from Mobile Bay, the U.S. Gulf Coast, and other U.S. supply basins. Pending regulatory clearance, SunShine is to begin service in 1995 with 325 MMcfd of capacity, which is expected to increase to 800 MMcfd by 2000. The project includes an interstate line from Mississippi through Alabama and into Florida and an intrastate Florida pipeline starting in Okaloosa County. SunShine sponsor Coastal Corp. holds a 40% interest in the project and Florida Power Corp. 30%.

NOVA CORP., Calgary, said service on its Alberta natural gas pipeline system will be interrupted part of this month while new capacity is tied in. There will be outages in service of as much as 1.2 bcfd, or about 12% of capacity. The work is scheduled for completion by May 21 .

PETROCHEMICALS

EXXON CHEMICAL CO., Amoco Chemical Co., and China American Petrochemical Co. Ltd. (Capco) of Taipei formed a joint venture to build a $1 billion (Singapore) ($617 million U.S.) aromatics complex on Pulau Ayer Chawan Island off Singapore. The complex expected to be in operation by 1996, will include a reformer and units to produce paraxylene and benzene. Exxon holds a 50% interest in the project, Amoco 40%, and Capco 10%.

DENKI KAGAKU KOGYO KABUSHIKI KAISHA (Denka) assigned ABB Lummus Crest Inc., Bloomfield, N.J., exclusive worldwide licensing and basic engineering rights to its acrylonitrile butadiene styrene and styrene acrylonitrile polymer resin technologies. Lummus and Denka will offer several processes to produce a full range of products.

REFINING

SAUDI ARABIAN MARKETING & REFINING CO. (Samarec) said work to expand its Yanbu, Saudi Arabia, refinery to 300,000 b/d capacity from 170,000 b/d will start in October. Ten additional process units will be installed. In other Saudi projects, seven units will be installed at the Jeddah refinery and four at Riyadh. The total program is expected to raise Samarec's gasoline yield to 179,000 b/d, kerosine to 72,000 b/d, and gas oil to 156,000 b/d. Fuel oil production will decline to 77,000 b/d.

PETROLEOS DE VENEZUELA SA unit Citgo Petroleum Corp. purchased Amoco Oil Co.'s asphalt refinery in Savannah, Ga., a distribution terminal in Wilmington, N.C., and 135 rail cars designed to move asphalt. Price is not disclosed.

TOTAL restarted some units at its 120,000 b/d Provence refinery at La Mede in Southeast France last month. Commercial output of butane, gasoline, diesel, and fuel oil began Apr. 19 from processing units not damaged in a Nov. 9, 1992, explosion and fire that killed five employees and damaged the refinery's catalytic cracker, which still is being repaired (OGJ, Nov. 16, p. 38).

ESSO STANDARD THAILAND LTD. let a $3 million contract to Honeywell Ltd., Bracknell, U.K., for safety systems to be installed on sulfur recovery and platformer units as part of an upgrade of its refinery at Sriracha, Thailand.

SUN let contract to Brown & Root Braun, Houston, for engineering, procurement, and construction management of projects to reduce benzene emissions from refineries at Marcus Hook, Pa., and Toledo. Brown & Root Braun will design and install modifications for waste water streams to comply with environmental rules. Construction is to begin this quarter and be complete by the end of first quarter 1994.

EGYPT'S Enppi of Cairo let contract to KTI Group for basic engineering and critical design support for Alexandria Petroleum Co.'s Relube plant. The 30,000 metric ton/year waste lube oil rerefining plant will be built next to an existing complex. Completion is scheduled for spring 1995.

DRILLING-PRODUCTION

NORSK HYDRO AS, Oslo, let a 560 million kroner ($80 million) contract to Kvaerner Engineering AS, Lysaker, Norway, for fabrication of a 9,000 metric ton module support frame for Norway's Troll oil platform. Kvaerner earlier agreed to build the concrete hull (OGJ, Feb. 1, p. 23). Work will take place at the Rosenberg Verft yard, Stavanger, Norway, with delivery scheduled for February 1995.

PETRO-CANADA, Calgary, signed a $29 million (Canadian) agreement with Sonatrach Inc., Algiers, for development work in Southeast Algeria's lllizi basin. Under a 5 year agreement, Petro-Canada will acquire 621 miles of seismic data and reprocess 1,243 miles of seismic data. The Canadian company will also drill at least five wells to earn an undisclosed share of reserves discovered. The agreement, subject to 5 year renewal, covers the basin's 5,092 sq mile Tinrhert block.

SOUTHERN PETROLEUM NL, Wellington, N.Z., 1 Ngaere oil well in onshore Taranaki basin's Waihapa field flowed 6,000 b/d. Southern called it New Zealand's most prolific well. The company will drill the 2 Ngaere development well 1 km north.

MAXUS SOUTHEAST SUMATRA INC., a unit of Maxus Energy Corp., Dallas, plans more drilling after its 3 Banuwati delineation well cut 109 ft of net pay in three Talang Akar zones at a site about 1 mile southeast of Maxus 2 Banuwati wildcat, which flowed 13 MMcfd of gas from the same zone. The 3 Banuwati, in 71 ft of water on the Southeast Sumatra production sharing contract area in the Java Sea about 86 miles north of Jakarta, flowed 26.3 MMcfd of gas through a '%4 in. choke with 1,419 psi flowing tubing pressure from 20 ft of perforations above 8,852 ft.

MAXUS ENERGY will sell its 24.27% interest in the 5.7 million acre Northwest Java production sharing contract operated by ARCO. Maxus nets about 18,000 b/d of oil from the contract area's 130,000 b/d production. It retained Merrill Lynch & Co. to aid in the sale.

W.R. GRACE & CO., Boca Raton, Fla., completed the sale of two Grace Offshore Co. units (OGJ, Mar. 22, p. 42). In the $57 million trades, it sold Huthnance Drilling Division, New Iberia, La., to a joint venture of Mike Mullen Energy Equipment Resources Inc. and Falcon Drilling Co., as well as Booker Workover Division, Houma, La., to Offshore Rigs LLC.

OCCIDENTAL PETROLEUM CORP. started production on its 494,000 acre Block 15 in Ecuador. Production will average about 15,000 b/d during May and June, increasing to 30,000 b/d by July. Oxy is operator under a risk service contract with state owned PetroEcuador.