INDUSTRY BRIEFS

LNG

COLUMBIA LNG CORP., a unit of Columbia Gas System Inc., Wilmington. Del., agreed to contribute its Cove Point, Md., liquefied natural gas terminal and associated pipeline assets as an equity interest in a joint venture with a unit of Potomac Electric Power Co. (Pepco), Washington, D.C., that is seeking FERC approval to provide peak shaving gas service starting in the 1995-96 winter. Pepco's subsidiary is to contribute equity and debt totaling $25 million to recommission certain Cove Point terminal facilities and build a new liquefaction unit.

GAS MARKETING

OHIO agreed to buy gas directly for 234 state facilities beginning Dec. 1 under a 1 year, $3.5 million contract with Enron Access Corp., Dublin, Oh. Facilities participating in the group direct gas purchase program are expected to consume about 960 MMcf of gas under the agreement, saving Ohio taxpayers about $500,000. Enron Access is a unit of Enron Gas Services Corp., Houston.

PETROCHEMICALS

BANK OF CHINA signed contracts last month for two export credit bank loans from Italy for a combined $99.3 million to upgrade chemical plants in Northwest China. One is for $74.1 million to finance China Petrochemical International Co.'s purchase of ammonia production equipment from Tecnimont SpA of Italy for the Urumqi, Xinjiang Uygur autonomous region. plant. Another $25.2 million will be spent to buy equipment from Snamprogetti SpA for a plant in Lanzhou, Gansu province.

JAPAN'S Mitsui & Co., Marubeni Corp., Mitsubishi Corp., Sumitomo Corp., Itochu Corp., and Nissho Iwai Corp. agreed to guarantee as much as $2 billion for Royal Dutch/Shell Group's construction of an 80 million metric ton/year refinery and 300,000 ton/year ethylene production unit in southern China's Guangdong province. The deal represents Japan's biggest private sector loan to China, reports Japanese newspaper Nihon Kogyo Shimbun. The $5.5 billion project is scheduled for completion in 1997. Shell and China are 50-50 partners.

COMPANIES

SEAGULL ENERGY CORP., Houston, paid $194 million for Nova Corp. unit Novalta Resources Inc., Calgary, including interests in oil and gas leases in 95 fields, mostly in Alberta. Assets include 535 wells producing a combined 50 MMcfd of gas and 1,100 b/d of crude oil and condensate, several gathering systems and gas processing plants, and about 250,000 acres of undeveloped leases. The deal, to be effective at yearend, includes 260 bcf of gas equivalent reserves, 80% of which are in 16 fields with a combined total of 400 wells and reserves to production ratio of 12 1/2 years.

DRILLING-PRODUCTION

ALCORN (PRODUCTION) PHILIPPINES INC., a unit of Vaalco Energy Inc., Houston, and .partners received approval for a $42.8 million 1994 work program in West Linapacan A field off Palawan Island, Philippines. Work next year under Service Contract 14 is to include reentering two of three offshore West Linapacan A wells producing a combined 6,000-7,000 b/d of oil in about 1,100 ft of water, as well as deepening the B-1 offshore wildcat 15 miles away in West Linapacan B field.

BP EXPLORATION OPERATING CO. LTD. won U.K. Department of Trade & Industry approval to develop North Sea Block 30/17b Medwin field. BP estimates Medwin will produce 5 million bbl of oil during a 9 year field life. Medwin will be developed by extended reach drilling from Clyde platform on the same block. Work is scheduled to start early in 1994.

HAMILTON OIL CO. LTD., London, let a $45 million ($67.5 million) contract to THC Fabricators (U.K.) Ltd., Hartlepool, for fabrication work on Douglas field development on Irish Sea Block 110/13 (OGJ, Nov. 1, p. 34). THC will build a 7,500 metric ton processing deck, three bridges, a flare boom, and a control module. Delivery of the deck is scheduled for spring 1995.

PETROLEOS DE VENEZUELA SA unit Lagoven let contract to Maxus Energy Corp. as 95% interest holder and partner Otepi Consultores, 5%, for a 3 year work program to help reactivate Venezuela's Quiriquire unit. Work is to start in 1994 with a study of fields and a 3D seismic program on potential deep prospects. Maxus' plans include starting a field reactivation program and drilling two outpost wells.

LAGOVEN let contract to Noble Drilling Corp. or Noble's Dick Favor and Carl Norberg jack ups to start work in Lake Maracaibo in January 1994. The Dick Favor is undergoing reactivation in the Gulf of Mexico, and the Carl Norberg currently is stacked off Gabon. Both rigs are under 1 year contract with options to extend.

THE U.S. BUREAU OF INDIAN AFFAIRS proposed a rule that would eliminate premiums, bonuses, and like payments from consideration in calculation of the royalty price for crude oil from Osage tribal land in Oklahoma. The Interior Board of Indian Appeals concluded that current rules require a producer to pay royalties based on the highest price available to it, whether or not it receives that price. BIA said the language and the IBIA ruling may be discouraging purchasers from offering bonus prices for crude.

NORWAY'S Den norske stats oijeselskap AS reported West Gullfaks field in the Norwegian North Sea will produce 5 million bbl of oil in 1994. A second development well is likely to improve on Statoil's 7.3 km extended reach drilling record set earlier this year (OGJ, Feb. 15, p. 31). This record will soon be challenged by another well from a Gullfaks platform under a recent plan to develop South Gullfaks field. Statoil proposes a 10 km well from Gullfaks A for first production in 1998 (OGJ, Oct. 4, p. 36). West Gullfaks is estimated to hold 22 million bbl of oil. Field development will cost 180 million kroner ($25 million).

ABU DHABI CO. FOR ONSHORE OIL OPERATIONS through general contractor Baker/MO Services Inc. awarded design. procurement, and construction management for two 10,000 b/d central production plants in Abu Dhabi to Mustang Engineering Inc., Houston. Along with oil separation. the Zubbaya plant will be equipped with 10 MMscfd gas compression, dehydration. and gas refrigeration. The Rumaitha plant has oil separation equipment only. Both plants are scheduled to start up in first quarter 1994.

PIPELINES

U.S. FEDERAL ENERGY REGULATORY COMMISSION will allow gas pipelines to hire outside contractors to perform initial environmental analyses of proposed projects. FERC used contractors for environmental surveys on a few projects in the past to speed processing of applications, but the Office of Management and Budget objected, Now OMB has approved pipelines' use of contractors if FERC supervises them and accepts their findings.

QUESTAR PIPELINE CO., Salt Lake City, plans to begin injecting additional gas in second quarter 1994 into its Clay Basin storage facility, after receiving FERC approval of a 10 bcf capacity expansion. Questar soon will begin installing three 6,500 hp compressors at the Northeast Utah gas storage site. Clay Basin working gas capacity is to reach 46.3 bcf following completion of the $50 million project and cushion gas 63.7 bcf. Clay Basin's peak gas deliverability in 1995-96 is to increase to more than 800 MMcfd from 575 MMcfd.

ENRON GAS SERVICES CORP., Houston. on Jan. 1, 1994, will begin offering a hub trading program, including transportation and balancing services, that will allow customers access to Henry hub through Enron facilities in Louisiana, including the 560 mile intrastate system of Louisiana Resources Co. Pipeline (LRCP) and Napoleonville, La., gas storage facility, The LRCP system supports sales and transportation transactions for about 850 MMcfd of gas. Napoleonville storage facility is to begin operating next month with 4 bcf of working gas capacity, a maximum withdrawal capability of 400 MMcfd and injection capability of 200 MMcfd.

ARKLA INC., Shreveport, plans to expand facilities of its Perryville, La., hub to create a market center for gas from the Arkoma, Anadarko, East Texas, Permian, and Hugoton basins. Seven pipelines currently interconnect near Perryville with Arkla pipeline systems and seven other converge in the area. Meantime, Arkla and Texas Eastern Transmission Corp., Houston, agreed to withdraw complimentary applications at FERC that would have allowed Tetco to move Arkoma gas across Arkla's pipeline system.

U.S. DEPARTMENT OF TRANSPORTATION'S Research and Special Programs Administration (RSPA) seeks public comment on proposals by the National Association of Pipeline Safety Representatives (Napsr) on streamlining pipeline rules. In 1990, RSPA asked Napsr to review its pipeline safety standards and recommend revisions that would make the regulations more explicit, understandable, and enforceable.

REFINING

PETROLEOS DEL NORTE SA bought two reciprocating gas compressors with a combined value of 1.5 million ($2.25 million) from Peter Brotherhood Ltd., Peterborough, U.K. They will be used to compress hydrogen in a desulfurization plant being built at the Somorrostro refinery, Vizcaya, Spain, by Technicas Reunidas SA, Madrid.

ABB LUMMUS CREST INC. and Criterion Catalyst Co. LP expanded their SynSat process to selectively desulfurize FCC naphthas. The new process will allow refiners to meet low sulfur specifications expected for reformulated gasoline. It will remove sulfur from light, heavy, or full range naphtha cuts at low pressure and high space velocity. Through an agreement with TPA Inc., Dallas, the companies also will offer modular plants.

SOUTHEAST CHINA'S Fujian province started up its first refinery, a plant expected to process 50.000 b/d of crude. Financing was undertaken jointly by the provincial government and China Petrochemical Corp. A terminal at East Fujian's Meizhou Bay includes three berths for 5,000 dwt tankers and handling capacity of 100,000 metric tons/year.

CAYMAN RESOURCES CORP. unit Cyril Petrochemical Corp. is scheduled to restart its 12,500 b/cd capacity Cyril, Okla., refinery in December. Warren American Oil Co. will supply at least 2.000 b/d of crude to the renovated plant, which has been shut down since 1984.

SIMULATION SCIENCES INC. and Bonner & Moore Management Science are incorporating Bonner & Moore's Assay 2000 data with SimSci's ROM system for on-line modeling of crude oil assays. The combination is designed to generate accurate product distillations and properties and predict crude qualities and product yields.

EXPLORATION

LAGOVEN plans to spend $114 million for exploration during the next 5 years. The investment is expected to help the company add 2.2 billion bbl of condensate and light and medium grade crude to its reserves. Lagoven hopes to increase its reserves by 416 million bbl in 1994. In the medium term. it hopes to increase potential productive capacity of condensate and light and medium grade crude by 103,000 b/d from new fields.

ARCO PHILIPPINES INC. a unit of ARCO International Oil & Gas Co., Plano, Tex., will take a farmout on unspecified interests in adjacent offshore Philippine tracts by joining a group of Filipino companies in a 2D seismic survey of a combined 12,000 sq km of acreage off Borneo in the South Sulu Sea, about 900 km south of Manila. Data are to be collected by yearend 1994 and processed and evaluated by early 1995. ARCO and partners could spud a wildcat in the area as early as 1995, if justified by a basin study.

AMOCO PRODUCTION CO. and partners plan to production test a wildcat on Matagorda Island Block 636 off Texas in the Gulf of Mexico after electric logs and tests revealed hydrocarbons, Partners set casing to 17,100 ft in the 18,834 ft 1 OCS-G 13768 well and plan to lay a pipeline from the wellsite to Platform C on Matagorda Island Block 623 to conduct the production tests. Block 636 is next to a three tract field discovered by Anadarko Petroleum Corp. in 1980 that produces 1 85 MMcfd of gas and 1,400 b/d of condensate.

RESEARCH

U.S. DEPARTMENT OF ENERGY'S "tiger team" evaluation proposed a number of environmental, safety, and health changes for the National Petroleum & Energy Research Center, Bartlesville, Okla. The report cited 1 74 actions and 86 potential Occupational Safety and Health Administration violations that should be corrected to bring the facility into full compliance. None of the findings or concerns required any facilities or operations to be shut down.

GAS PROCESSING

PANCANADIAN PETROLEUM LTD. and Amoco Canada Ltd.. both of Calgary, plan to build two natural gas liquids processing plants in the Empress area of Alberta, east of Medicine Hat, to serve the U.S. export market. The plants, each with 800 MMcfd capacity and worth $30 million (Canadian) apiece, are scheduled for completion within 18 months.

ALTERNATE FUELS

A $500 MILLION integrated coal gasification combined cycle power plant, called by its European Community backers the largest of its kind in the world, is scheduled to begin operations this month at Buggenum, Netherlands. The 250,000 kw plant is funded by the four power utilities belonging to the Dutch Electricity Generating Board.