INDUSTRY BRIEFS

PIPELINES

CANADA'S National Energy Board will begin hearings in Ottawa Feb. 7, 1994, on pipeline tolls for TransCanada PipeLines Ltd., Calgary. TransCanada operates the main gas pipeline system from Alberta to markets in eastern Canada and the U.S. The board said TransCanada's proposals would result in a reduction in current tolls of 0.2%. Deadline for submissions by intervenors in the hearings is Nov. 4.

U.S. FEDERAL ENERGY REGULATORY COMMISSION rescinded a June 1992 certificate granted to Questar Pipeline Co., Salt Lake City, Utah, to build pipeline facilities at its Fidlar compressor station. The certificate stipulated that the facilities be completed within a year. In June Questar requested an 18 month extension, With no construction under way at the time Questar filed the request. FERC determined that the 43 miles of loops and additional compression were unnecessary.

WESTCOAST ENERGY INC., Vancouver. B.C., began monitoring slope movements at a 3 year old pipeline rupture site and other sites with similar instability problems. The monitoring stems from an Oct. 6, 1990, rupture of a Westcoast 30 in. gas pipeline near Pink Mountain, B.C. The Transportation Safety Board of Canada said the rupture was caused by cracking in a wrinkle on the pipeline surface, leading to a brittle fracture of the pipe. Slow movement of the sloping ground where the line was buried caused buildup of axial stresses on the pipe.

REFINING

A 125,000 B/D refinery built in Balongan, West Java, by Japan Gas Co. and Indonesia's Pertamina is scheduled to start up in April 1994, 8 months ahead of schedule. It originally was designed to produce products for export, but 40% of plant output will be sold in Jakarta and West Java to meet increasing demand there. Current demand has surpassed the combined 850,000 b/d capacity of Indonesia's eight refineries.

KAZAKHSTAN, a republic of the former Soviet Union, formed Kazakhgaz holding company to aid downstream development of Karachaganak oil and gas field. Plans call for a refinery to be built at Uralsk to process 3.5 million metric tons/year of crude and condensate and 6 billion cu m/year of gas. Long term plans call for a complex to be built there to produce 400,000 metric tons/year of petrochemicals.

CASTLE ENERGY CORP., Blue Bell, Pa., completed its purchase of Powerine Oil Co., which owns a 49,500 b/d refinery in Santa Fe Springs, Calif. Castle bought the company via a purchase option it acquired from Metallgesellschaft Corp. (MG), which owns 49% of Powerine. Castle paid $10 million for the company and assumed Powerine's $135 million debt. In a related deal lasting through Jan. 1, 1998, MG unit MG Refining & Marketing Inc. agreed to buy all of Powerine's refinery products at a floating price pegged to the price of Alaskan North Slope crude oil plus an increment.

CHEVRON CORP. let an engineering and procurement contract to Parsons Corp. unit Ralph M. Parsons Co. for work on a $250 million reformulated gasoline project at its 229,000 b/cd Richmond, Calif., refinery. Parsons will upgrade an alkylation plant, build a TAME unit with C5 selective hydrogenation, revamp fractionation facilities to produce propane, isobutane, butane, and pentane, and work on associated utilities, off site facilities, and a control building.

IDEMITSU KOSAN CO. Dec. 1 will begin selling gasoline that contains 1 vol % benzene. Its new Zearth brand gasoline in Japan will be sold for the same price as regular unleaded.

ESSO MALAYSIA BHD. let a 2.5 billion yen ($23.6 million) turnkey contract to JGC Corp., Tokyo, to expand and renovate its 53,000 b/cd Port Dickson, Malaysia, refinery. Capacity will be expanded to 75,000 b/cd.

TURKISH PETROLEUM REFINERIES CORP. scheduled an Oct. 26 start-up of a 16,500 b/d hydrocracker at its 224,000 b/d Izmir refinery on the Aegean Sea coast. It started up a 14,500 b/d capacity hydrocracker Oct. 21 at its 113,000 b/d Kirikkale refinery in Central Anatolia. Both units are UOP licensed. They will process a combined 1.5 million metric tons/year of heavy vacuum gas oil to produce LPG, naphtha, jet fuel, kerosine, and gas oil. The units cost a combined $500 million.

PETROCHEMICALS

INDUSTRIALIST John Gokongwei proposes to build a $300 million petrochemical plant at an undisclosed site in Philippines. Gokongwei, whose interests include real estate, publishing, energy, and food, asked for fiscal incentives from the government's board of investments for the project. His proposal comes 6 years after Taiwan, s USI Far East Corp. offered to build a $370 million petrochemical complex on Luzon Island, a project that was scrapped after it ran into opposition from Manila.

MOBIL CORP. licensed Bulgarian state company Neftochim to use its low pressure xylene isomerization (MLPI) technology to produce the main raw material for polyester fibers and films. Neftochim will modify a unit to use the technology at its Burgas refinery. Using Mobil's ZSM-5 catalyst, MLPI converts orthoxylenes and metaxylenes into paraxylene isomer, a basic building block used to produce polyester fibers and films. It is Mobil's first such licensing agreement in eastern Europe.

UOP will custom make high purity chemicals at its adsorptive separation facility in ShrevePort, La. The Sorbex process uses liquid phase adsorption on a solid bed adsorbent to separate complex mixtures that cannot be separated by conventional means. A variety of hydrocarbon feedstocks with boiling points as high as 260 C. (500 F.) and melting points to 150 C. (300 F.) can be processed.

COMPANIES

ARCO agreed to sell international marketing unit ARCOBrasil Participacoes e Investimentos Ltda. for an undisclosed sum to Cia. Brasileira de Petroleo Ipiranga. Sale of its Brazilian operations, which generated $1.8 billion revenue in 1992, stems from ARCO's program to focus on core operations. The sale includes Cia. Atlantic de Petroleo, which operates 2,600 franchised service stations in Brazil, along with a terminal and truck distribution structure to support the stations.

BORAL LTD., Sydney, won a 72.1 % controlling interest in Sagasco Holdings Ltd. after acceptance of its $3.90 (Australian)/share offer to major Sagasco shareholders, the South Australia government with a 31% interest and Santos Ltd. with a 19.9% interest. At that share price, all of Sagasco would be valued at about $850 million. Boral started its bid for 100% of Sagasco, a South Australian gas utility and oil and gas exploration company, in September at $3.50/share.

EXPLORATION

BOW VALLEY ENERGY INC., CALGARY, AND LOUISIANA LAND & EXPLORATION Co. unit LL&E Algeria Ltd. agreed to explore Algeria's Ghadames basin Mensel-Ledjmat Block 405 and Oulad N'Sir Block 215. The first phase of seismic data has been acquired, a further seismic program will begin soon in Block 405, and a well is planned for 1994. Operator LL&E holds a 65% interest in the deal, Bow Valley 35%. It is Bow Valley's first venture in Algeria.

ALTERNATE FUELS

U.S. DEPARTMENT OF ENERGY awarded a cost shared $138 million contract to a team headed by General Motors Corp. to develop a hybrid car that combines electric propulsion with conventional heat engine systems. The vehicle is to combine advances in electric propulsion and small heat engines, minimizing operational inefficiencies and recouping some energy lost during braking. An example would be a gas turbine driving an alternator connected to an electric propulsion system using a battery, flywheel, or capacitor.

DRILLING-PRODUCTION

GAS PRODUCTION start-up from Britannia gas/condensate field in the U.K. North Sea will be delayed until late 1998 from its originally planned 1997 start, operators Chevron U.K. Ltd. and Conoco (U.K.) Ltd. reported. The field's 12 interest holders say this move will give them time to help reduce development costs and concentrate on additional commercial options to sell gas and gas liquids. The field, 130 miles northeast of Aberdeen, holds an estimated 2.5 tcf of recoverable gas and as much as 200 million bbl of recoverable condensate and gas liquids. Britannia is said to be the U.K.'s largest undeveloped discovery (OGJ, May 31, p. 21 ).

ENRON OIL & GAS CO.'S Matagorda Island Block 556 A-9 gas discovery in the Gulf of Mexico 10 miles south of Port O'Connor, Tex., is flowing at the rate of 10 MMcfd and 20 b/d of condensate through a 29/64 in. choke with 2,400 psi flowing tubing pressure. The well cut four gas zones with combined thickness of 100 ft below 7,800 ft. Extension well C-16, 5,200 ft east of the discovery, cut two zones with combined 55 ft thickness below 8,500 ft. Drilling of the extension continues, with the well expected to be placed on production before yearend.

KUWAIT is considering granting U.S. companies concession rights in an oil field repossessed under a newly demarcated border with Iraq. Kuwait Oil Minister Ali al-Baghli said U.S. companies could receive permission to produce oil from 11 wells in Rutqa oil field, which taps the same reservoir as Iraq's South Rumaila field. Before Iraq's August 1990 invasion of Kuwait, Kuwait produced 10,000 b/d from Rutqa while Iraq produced an unknown volume from wells farther north.

KERR-MCGEE OIL (U.K.) PLC started oil production from U.K. North Sea Gryphon oil field Oct. 14, less than 10 months after U.K. government approval of the development plan. Peak production of 50,000 b/d is expected by mid-1994. The field is in 370 ft of water 200 miles northeast of Aberdeen in Block 9/18b. Development cost was $384 million. Operator Kerr-McGee holds a 25% interest in the field, Clyde Petroleum plc 35%, Santa Fe Exploration (U.K.) Ltd. 25%, and Aran Energy plc 15%.

CANADIAN FRACMASTER LTD., Calgary, plans another Russian venture to convert military equipment for oil field service and environmental cleanup work in Siberian fields. The company, one of the first to operate in Siberia, expects to produce 100,000 b/d of oil from its current operations in workovers of Siberian wells.

LOUISIANA LAND & EXPLORATION CO. bought an 11.26% working interest in U.K. North Sea T Block 16/17 for $186.6 million, and Murphy Oil Corp. unit Murphy Petroleum Ltd. bought a 2.74% working interest for $45.4 million. Murphy's purchase gives it a total 11.26% interest in the block. Sales are subject to government approval and other conditions.

KUWAIT OIL CO. let a $100 million contract to Ralph M. Parsons to provide program management services to restore and increase oil production and processing in Kuwait. Work will include restoration of oil production and processing facilities; repair, reconstruction, and new construction of some buildings and utilities in Ahmadi township; maintenance support for Kuwait Oil installations and computer systems; and engineering and construction of energy production facilities.

PENNZOIL CO. unit Pennzoil Petroleum Co. and Amoco Corp. unit Amoco Production Co. exchanged interests in eight U.S. Gulf Coast oil and gas fields with combined production of 36 MMcfd of gas and 1,800 b/d of oil. Pennzoil got Amoco's interests in Red Fish Point field of Louisiana and Burnell and North Pettus fields in South Texas. Amoco got Pennzoil's interests in Judge Digby, False River, Moore-Sams, Profit Island, and Frisco fields in Louisiana's False River area.

OILSANDS

MURPHY OIL CORP. unit Murphy Oil Co. Ltd. agreed to pay $150 million (Canadian) for a 5% interest in the Syncrude Canada Ltd. oilsands project in northern Alberta. Murphy will pay $60 million this year and the balance in five annual installments with interest of 6.25%. Its share of production for the next 20+ years will be 9,000 b/d, and its share of reserves is estimated at 80 million bbl. Closing is scheduled before yearend. Alberta's remaining 11.74% interest in oilsands mining in the Fort McMurray region of northern Alberta is also on the market.

ENVIRONMENT

GASOLINE AND DIESEL FUEL that apparently leaked from a service station early this month in the Lomas del Nilo district of Guadalajara into an underground water strata have been siphoned off and the leak brought under control. Civil authorities in Lomas del Nilo, 300 miles northwest of Mexico City, recovered 143 bbl of fuel and water from the underground site. Last year a 5 mile stretch of underground drains exploded in Guadalajara and killed more than 200 persons, injured 1,450. and left 4,500 homeless (OGJ, May 4, 1992, Newsletter).

TRANSPORTATION

A PROPOSED marine oil terminal at Port Qasim, Pakistan, received a $32.8 million financing package from the Asian Development Bank and $19 million from Commonwealth Development Corp. Fauji Foundation's Fauji Oil Terminal & Distribution Co., in collaboration with Canadian and U.S. participants, will build and operate the terminal. It will have 9 million metric tons/year capacity and berthing eventually to accommodate 75,000 dwt tankers. At first, however, only 50,000 dwt vessels will be received because of channel restrictions.

Copyright 1993 Oil & Gas Journal. All Rights Reserved.