INDUSTRY BRIEFS

GAS STORAGE

RIVERSIDE GAS STORAGE CO., a combine of units of Texas Eastern Transmission Corp., Houston, and Equitrans Inc. pipeline unit of Equitable Resources Inc., Pittsburgh, is holding an open season through July 30 to offer nondiscriminatory, open access capacity at the proposed Riverside market area storage field in Greene and Fayette counties, Pa. Texas Eastern Riverside Co. and ET Storage Co. expect to begin injecting gas into storage in April 1995, in time to start withdrawals during winter 1995-96.

REFINING

KOCH REFINING CO.'S 218,500 b/cd Rosemount, Minn., refinery Cut SO2 emissions to less than an average 10 tons/day from the 1989-90 level of 17 tons/day. Completion on construction of a hydrogen plant and sulfur removal plant in its $220 million clean fuels project allowed the current reductions. An older, less efficient sulfur removal plant was closed permanently. Work will be completed in August on a distillate hydrotreater, a unit that will cut sulfur contents of diesel fuel by 90%, decreasing SO2 emissions from diesel trucks and cars by at least 34 tons/day where Koch fuel is used in Minnesota and Wisconsin.

SALOMON INC. unit Phibro Energy USA Inc. plans a $200 million residual fuel upgrade at its 123,500 b/cd Texas City, Tex., and 67,000 b/cd Houston refineries. Work includes relocation of a 63,000 b/d heavy oil residfiner, building a residual oil supercritical extraction unit, and adding sulfur handling and other offsite facilities necessary to operate the new units. Completion is scheduled for first quarter 1996.

PHIBRO USA agreed to buy Dow Chemical Co.'s 200,000 b/d Oyster Creek refinery at Freeport, Tex., for an undisclosed price. Phibro will dismantle and remove all the equipment currently at the Oyster Creek site. Much of the equipment, including the residfiner, will be reassembled and incorporated into the residual fuel upgrading project at its Houston and Texas City plants, while excess hardware will be sold. Phibro also agreed to a long term purchase of unrefined hydrogen from Dow, which will be delivered from Freeport via existing pipeline.

KUWAIT PETROLEUM INTERNATIONAL plans to shut down its 85,000 b/d Naples refinery Sept. 20 and recommission it temporarily as an oil products import terminal. KPI said authorities in Naples and the Italian government long sought to remove refineries and chemical plants from the area east of Naples, Middle East Economic Survey reported. Italian outlets would be supplied using local products purchases, along with imports from Kuwait and other sources. Total products requirement is 3.2 million metric tons/year, including LPG, gas oil, jet fuel, and bitumen.

DRILLING-PRODUCTION

LOUISIANA LAND & EXPLORATION CO., New Orleans, agreed to buy Nerco Oil & Gas Inc., Lafayette, La., for $353.7 million cash. Leases acquired by LL&E include working interests averaging more than 50% in 50 producing oil and gas fields, mainly in the Gulf of Mexico, many operated by Nerco. The deal includes Nerco's interests in leases on 53 undeveloped gulf blocks, Nerco's onshore Black Lake field, not included in the sale, will be disposed of by Nerco before closing. Closing is expected by mid-September.

NOBLE AFFILIATES INC., Ardmore, Okla., is evaluating design plans for an eight pile drilling-production platform able to handle 8,000 b/d of oil and 100 MMcfd of gas from federal lease blocks off Louisiana in the Gulf of Mexico. Installation is expected to occur in late 1994 on East Cameron Blocks 320, 331, and 332 Noble unit Samedan Oil Corp. acquired from Freeport-McMoRan Inc. for $100 million cash (OGJ, July 12, p. 36).

MOBIL CORP. started producing gas from Lancelot and Guinevere unmanned platforms in the U.K. North Sea. The fields, 40 miles off Norfolk County, England, straddle Blocks 48/17a, 48/17b, and 48/18a. The Lancelot platform weighs 2,251 metric tons, stands in 68 ft of water, and has six well slots. The Guinevere structure weighs 1,537 metric tons, stands in 55 ft of water, and has three well slots.

CANADA'S completion tally during first half 1993 reached a combined total of 4,174 oil and gas wells and 4.74 million m of hole, the highest marks since 1988. There were 1,157 gas well completions, more than double 1992's midyear total of 532. There were 2,125 oil well completions. The success rate was 78%, compared with 69% in 1992 and 1991. The biggest boost came from Alberta's royalty holiday for development wells, which accounted for 2,248 wells, compared with 1,016 in the same period of 1992.

WESTERN CANADA rig utilization average during first half 1993 stood at 53%, the highest since 1988, the Canadian Association of Oilwell Drilling Contractors reported. During the last week of June, utilization reached 65%, with 272 rigs working out of a total 423 rigs owned by Caodc members. Average utilization rate in first half 1992 was only 27%. That compares with a 48% average in the same period for 1988. The 1988 average covered 262 rigs at work, compared with 228 this year.

TOTAL OIL MARINE PLC, London, let a 7 million ($10.5 million) contract to KS Rasmussen Offshore AS, Kristiansand, Norway, to provide an accommodation vessel during development of Dunbar field in U.K. North Sea Block 3/14a. Anders Wilhelmsen & Co. AS's Port Regency accommodation vessel will support offshore hookup and platform commissioning in second half 1994.

NORSK HYDRO AS, Oslo, let an 800 million kroner ($108 million) contract to Polar Frontier Drilling AS, Bergen, Norway, for work in the West Troll oil region of the Norwegian North Sea. Sonat Offshore Drilling Inc.'s Polar Pioneer semisubmersible rig will carry out drilling and subsea equipment installation starting Mar. 1, 1994, for 3 1/2 years, with an option for 4 more years.

FIRE BROKE OUT on the South Ninian platform in U.K. North Sea Block 3/8 late July 17, following routine maintenance of one of two turbine generators. The turbine and adjacent production module were immediately shut down and the platform's 274 crew members mustered. Shetland coast guard was alerted. The muster lasted a little more than 1 hr, as firefighters waited on manhole covers to cool before they could direct water into an exhaust stack. Platform operator Chevron U.K. Ltd. said no evacuation was needed and total oil production from the Ninian complex was not affected.

WESTERN SIBERIA'S North Gubkinskoye oil field holds reserves estimated at 312 million bbl of oil and 45 million bbl of condensate. The condensate figure previously was reported incorrectly as billions of barrels (OGJ, July 19, p. 20).

SIBERIA'S Krasnoyarsk territorial Minor Council endorsed Yeniseineft, a Russo-Cyprian joint venture launched early in 1992 by state run Yeniseineftegazgeologiya geological enterprise and registered in Cyprus, to develop the Vankorskoye oil reservoir in Turukhansk district. Terms call for a refinery with as much as 14,600 b/d capacity to be built in the first stage of development to supply fuel for northern regions, then construction of a 480-500 km pipeline in the second stage to link the deposit with Tyumen based trunk lines. Vankorskoye holds reserves estimated at 1.08 billion bbl.

PETROCHEMICALS

SAUDI ARABIAN CHEMICAL INVESTMENT CORP. and Mobil Corp. formed a joint venture valued at $320 million to build a 20,000 b/d methyl tertiary butyl ether plant in Saudi Arabia. The project requires Saudi government approval. No timetable is disclosed. Mobil and Saudi petrochemical investment firm Chemvest conducted an engineering study 2 years ago (OGJ, May 20, 1991, p. 27) toward possible expansion of Mobil's downstream operations with construction of an MTBE plant most likely at Yanbu on the Saudi west coast.

BRITISH PETROLEUM CO. PLC will mothball 150,000 metric tons/year of capacity at its Baglan Bay, South Wales, ethylene plant. One production line will not be restarted after two trains with total capacity of 330,000 metric tons/year are shut down for maintenance in September. Europe's surplus of ethylene capacity lies behind the decision.

PIPELINES

AMERICAN PIPELINE CO. affiliate Red River Pipeline Co. LP started work on facilities that will allow bidirectional gas flow by Sept. 1 between Waha in Pecos County, West Texas, and Wheeler County in the Texas Panhandle. The project includes bidirectional flow capability at Waha with Westar Transmission Co. and the Lone Star header and in Wheeler County with ONG Western Inc. through its affiliate OkTex Pipeline. In another project, reversal was completed of Westar's meter with El Paso Natural Gas Co. at Waha, which enables American to move shippers' gas from the Westar-El Paso link to intrastate and interstate pipelines in the Anadarko and Permian basins through Westar and Red River.

COLUMBIA GAS SYSTEM INC. and main pipeline subsidiary Columbia Gas Transmission Corp. postponed filing of a reorganization plan for Columbia Transmission to allow discussions with its creditors to continue. The companies have been operating under Chapter 11 bankruptcy since July 31, 1991. They filed a motion July 15 with the U.S. Bankruptcy Court in Delaware requesting that the periods during which they have the exclusive right to file plans of reorganization be extended to Nov. 22.

GPM GAS CORP., Houston, purchased two gas gathering systems in Oklahoma from Panda Resources Inc., Tulsa, for an undisclosed price. It bought Panda's Vici system in western Dewey County and the Oakwood system in the eastern part of the county. The two systems include a combined total of 35 miles of high pressure gas gathering pipeline, allowing GPM to expand its gas gathering operations in western Oklahoma. The acquisition adds more than 3 MMcfd to GPM's system throughput.

PANHANDLE EASTERN CORP. unit Texas Eastern Transmission will provide a combined total of 18 MMcfd of firm gas transportation service to four U.S. Northeast utilities. It will provide the service from receipt points at Oakford, Pa., to requested delivery points for Philadelphia Electric Co., UGI Utilities Inc., Brooklyn Union Gas Co., and Elizabethtown Gas Co. This is Panhandle Eastern's first transaction under its Flex-XTM flexible expansion program to provide as much as 700 MMcfd of firm transportation capacity during a 10 year period on its four interconnected gas pipelines.

TRANS-ALASKA PIPELINE SYSTEM owners agreed to pay $98 million to native villages, fishermen, and thousands of other Alaskans harmed by the grounding of the Exxon Valdez, which spilled more than 260,000 bbl of oil into Prince William Sound in 1989. If the settlement is approved, it will be the first time plaintiffs other than the state and federal government have been awarded damages arising from the disaster. The settlement, signed July 19 in Anchorage, is meant to remove pipeline owner Alyeska Pipeline Service Co. from more than 300 lawsuits against it and Exxon Corp.

EXPLORATION

ADDISON & BAXTER LTD., Newport Pagnell, U.K., agreed to assist with upgrading and operating seismic survey vessels for Sevmorneftegeofizika, Murmansk, Russia, and Dalmorneftegeofizika, a Sakhalin Island organization, for use in 2D, 3D, and shallow water surveys. A&B also is holding discussions with Caspmorneftegeofyzrezvedka, Baku. Azerbaijan, to assist it with seismic services in the Caspian Sea, providing personnel for project management and supervision. The company will assist in sales of nonexclusive speculative seismic data acquired by the vessels.

AMOCO PRODUCTION CO.'S 1 OCS-G 6894 deepwater wildcat in the Central Gulf of Mexico's Viosca Knoll Block 915 cut 135 ft of net oil and gas pay in multiple sands. A sidetrack to test the lateral extent of the sands logged 170 net ft of oil and gas pay. The original hole was drilled to 12,568 ft in 3,236 ft of water. The sidetrack reached 13,411 ft total depth. Site is 100 miles south of Mobile, Ala., and 70 miles east of the Mississippi River mouth. Operator Amoco owns a 75% interest in the block, Shell Offshore Inc. 25%.

COMPANIES

AMERICAN EXPLORATION CO., Houston, settled lawsuits with Louisiana Intrastate Gas Corp., Alexandria, La., receiving a cash payment of $13.2 million, or about $10 million net after payment of royalties. The suit stems from the price of gas sold to LIG from Northeast Montegut field in Terrebonne Parish, La. Elsewhere, American Exploration received a $6.5 million cash payment for renegotiation of its contract to sell gas from Thomasville field in Rankin County, Miss. Under the amended contract, American agreed to reduce the price effective Jan. 1.

WEATHERFORD INTERNATIONAL INC., Houston, signed a letter of intent to acquire Tuboscope Vetco International Corp., also of Houston, in a trade valued at $370 million. The deal is subject to negotiation and execution of a definitive agreement and receipt of fairness opinions from investment bankers for both companies. Closing is expected during November-December.

CASTLE ENERGY CORP., Blue Bell, Pa.. is conducting a due diligence review for possible purchase of the stock of Powerine Oil Co., Santa Fe Springs, Calif. Powerine owns and operates a 46,500 b/cd heavy oil refinery in Santa Fe Springs as well as related assets. Metallgesellschaft Corp. (MG), which owns 49% of Castle, also holds an option to buy 100% of the stock of Powerine. Under an informally proposed structure, a Castle unit would acquire the option from MG, then exercise it.

Copyright 1993 Oil & Gas Journal. All Rights Reserved.