INDUSTRY BRIEFS

Refining

Shell Eastern Petroleum (Pte.) Ltd. and Petrochemical Corp. of Singapore (PCS) will invest $100 million in a 50-50 project to build a condensate splitting unit (CSU) at Shell's Pulau Bukom refinery in Singapore. The 70,000 b/d CSU will separate the feed into six products: LPG, light and heavy naphtha, kerosine, gas oil, and a small residue stream. Subsea pipelines will link the unit with Pulau Seraya, from which further lines will deliver naphtha to PCS's petrochemical complex on Pulau Ayer Merbau. Shell will manage all condensate feed supply and products offtake and operate the facility, which is expected to be completed by mid-2000.

Courts

Tulsa-based Williams unit Williams Production Co., BP Amoco plc, and the Southern Ute Indian Tribe jointly announced progress toward negotiating a settlement that would conclude claims asserted against Williams's ownership of coalbed methane leases in southwestern Colorado (OGJ, Feb. 1, 1999, Newsletter). Under the proposed agreement, Williams would convert its net-profits interest from oil and gas production on the disputed leases into a working interest. A part of this interest would be handed over to the Ute Tribe; in return, the tribe will relinquish all other claims against Williams outlined in the suit.

Companies

KeySpan Exploration & Production LLC, a unit of KeySpan Energy Corp., Hicksville, N.Y., will acquire 45% of Houston-based Houston Exploration Co.'s 100% working interest in its 55 undeveloped leases in the Gulf of Mexico. KeySpan also will provide up to $100 million/year for exploration, development, and platform and facility construction for the leases under a 3-year joint drilling program. Under terms of the agreement, Houston Exploration will act as operator and manager of the fields. KeySpan holds a 64% equity stake in Houston Exploration.

Columbia Propane Corp.,
a unit of Columbia Energy Group, Herndon, Va., signed an agreement to acquire all of National Propane Partners LP's 6.7 million outstanding common shares for $12 each. Columbia also will acquire the general partner interests and lesser unit interests of National Propane from subsidiary units of Triarc Companies Inc. Columbia Propane also will refinance about $141 million of National Propane's outstanding debt.

CalEnergy Gas (U.K.) Ltd.,
a unit of MidAmerican Energy Holdings Co., Des Moines, Iowa, acquired Ranger Oil (U.K.) Ltd.'s 67% interest in U.K. North Sea Anglia field for £39 million ($64 million). Anglia lies on Block 48/19b and produces about 40 MMcfd of gas. Ranger said the sale is part of a plan to reduce long-term debt to $300 million. CalEnergy, which will take over Anglia's operatorship from Ranger, sees the move as supporting the U.K. electricity and gas supply business of sister unit Northern Electric plc.

Pengrowth Corp.
acquired oil and gas reserves in the Strachan and Enchant areas of Alberta from Gulf Canada Resources Inc., Calgary, for $54 million (Canadian). Gulf Canada sold more than $1 billion in assets in the past year and says it has now completed about 95% of a program to reduce debt, which totaled $2.3 billion at the end of 1998.

W-H Energy Services Inc.,
Houston, completed its purchase of the logging-while-drilling and related measurement-while-drilling businesses, known as PathFinder, from Halliburton Co., Dallas, for an undisclosed sum. The purchase included certain North Sea directional drilling assets. The sale was mandated by the U.S. Department of Justice as a condition of Halliburton's merger with Dresser Industries Inc. (OGJ, Oct. 5, 1998, p. 40).

BP Exploration Operating Co. Ltd.
acquired Shell U.K. Ltd. and Esso Exploration & Production U.K. Ltd.'s 50% interest in U.K. North Sea Block 3/29b. The sales price was undisclosed.

Duke Energy Field Services Inc.,
Denver, agreed to acquire the South Texas natural gas gathering, treating, and processing systems of Koch Midstream Gathering & Processing Co., a unit of Koch Industries Inc, Wichita, for an undisclosed price. The deal closed Mar. 31 and includes 1,000 miles of pipeline covering 10 counties, the Three Rivers and Pettus cryogenic processing plants, and a small treating facility in Dewitt County.

Sunoma Energy Corp.,
Calgary, acquired the remaining 3% of Barrington Petroleum Ltd. and will form a publicly traded company. Privately owned Sunoma acquired 97% of Barrington last year in a $220 million (Canadian) takeover (OGJ, Oct. 5, 1998, p. 40).

Quicksilver Resources Inc.,
Fort Worth, plans to acquire nearly all of Unocal Corp. unit Spirit Energy 76's natural gas and crude oil assets in Michigan for $27 million in cash and $3 million in Quicksilver common stock. The assets, which include Spirit Energy's ownership in the Garfield and Beaver Creek Richfield units, will increase Quicksilver's working interest in Garfield to 99% from 54%. The sale includes about 20,000 net leasehold acres, which produce 13 MMcfed.

Gas distribution

LG&E Energy Corp., Louisville, acquired a 28% interest in Invergas SA for an undisclosed price, marking LG&E's third major gas distribution purchase in Argentina. Invergas holds 70% of Argentina's Gas Natural BAN SA, the second largest gas distribution firm in the country.

Gas marketing

Reliant Energy, Houston, was awarded a long-term contract valued at $250 million to supply natural gas feed to 10 chemical manufacturing plants in Texas owned by Huntsman Corp.

Exploration

Germany's RWE-DEA AG made a gas discovery on North Idku block in the Nile Delta off Egypt. The N. Idku-1X discovery well was the first of four exploration wells being deepened by operator RWE-DEA. Hungary's MOL Rt., a license partner, said two tests were carried out on the well. A pay zone at 2,156-93 m flowed 37.1 MMcfd of gas and 330 b/d of condensate through a 48/64-in. choke with 2,261 psi flowing tubing pressure. An interval at 1,768-85 m flowed 48.4 MMcfd of gas and 55 b/d of condensate through a 1-in. choke with 1,586 psi flowing tubing pressure. The three other wells will be deepened over the next 2 years. Interests are an RWE-DEA/Veba Oel combine 50%, ARCO 30%, and MOL 20%.

ENI unit
Agip Ireland BV was awarded the operatorship of six exploration blocks covering 1,540 sq km about 200 km off Ireland's west coast in 1,100-1,600 m of water. The blocks, which Agip holds 100% interests in, are 43/19, 43/20, 43/24, 43/25, 43/28, and 43/29. During the first 3 years, Agip will acquire seismic and conduct a geological and geophysical evaluation.

Santa Fe Energy Resources,
Houston, signed two production-sharing agreements with Chinese state-owned firm China National Offshore Oil Corp. to explore Blocks 16/02 and 16/05 in the South China Sea. The blocks respectively cover 3,500 sq km and 3,010 sq km and are about 60 miles southeast of Hong Kong in 240-600 ft of water. Santa Fe holds 100% interest in both blocks.

Pipelines

Colonial Pipeline Co., Atlanta, plans to lay a 171-mile, 20-in. petroleum products pipeline from Talladega, Ala., to Murfreesboro, Tenn., to serve markets in the southeastern U.S. The pipeline, which is expected to cost more than $200 million, is being built to meet a projected 35% increase in demand for petroleum products through 2015, said Colonial. The pipeline will have the capacity to ship 240,000 b/d of various grades of gasoline and 206,400 b/d of distillates.

McDermott Corp.'s
Indonesian unit has a "high probability" to win the contract to build a 650-km pipeline linking Natuna gas field to Singapore, reported the Jakarta Post. To date, Mc- Dermott has submitted the lowest bid of $335 million. Other bids were ETPM $382 million, Japan's Nippon Steel $415 million, and Italy's Saipem $372 million.

Canada's National Energy Board
approved the 15-mile Canadian segment of the $471 million Vector pipeline project to move natural gas from Dawn, Ont., to Chicago. The 344-mile line will transport 1 bcfd of gas to Chicago, connecting with the Alliance and Northern Border pipeline systems. Enbridge Inc., Calgary, and MCN Energy Group Inc., Detroit, are partners in the project, which will begin construction this year for completion by Oct. 1, 2000. Regulatory approval for the U.S. segment of the project is expected in the second quarter of this year.

U.S. Department of Transportation's
Research and Special Programs Admin- istration (RSPA) notified Alyeska Pipeline Service Co. of a probable violation. RSPA has investigated two incidents in the last 2 years where Alyeska overpressured its Trans-Alaska Pipeline System during start-up after planned shutdowns. RSPA proposed a compliance order to prevent future occurrences and may levy a fine of up to $50,000.

Retail marketing

Tosco Corp., Stamford, Conn., plans to acquire 137 retail gasoline and convenience stores in seven southeastern U.S. areas and Pittsburgh from BP Amoco plc. The newly purchased stations will be identified with Tosco's 76 and Circle K brands. Last month, Tosco sold about 320 stores in the Midwest, Texas, Utah, and Colorado for $125 million to undisclosed buyers, citing their locations as "outsideellipsecore operating areas."

Drilling-production

Hibernia oil field production resumed after an investigation identified the source of several power outages at the project off Newfoundland. Operations were shut down Mar. 20 after the second power failure in 9 days. An initial outage halted production for 6 days. Production is now being increased to 68,000 b/d. A report said the power outages were related to a software problem associated with wiring in the power generators and blocked fuel filters.

Indonesia
approved ARCO Muriah Inc.'s acquisition of a Muriah block off central Java from Royal/Dutch Shell. Shell owned a 100% stake in the 7,200 sq km block, which includes Kepodang gas field. ARCO Muriah says it plans to develop the field and has signed a memorandum of understanding with state electricity company PLN for the supply of gas from Kepodang field to the Tambak Lorok combined-cycle power plant on the north coast of central Java starting in early 2000.

Santa Fe Energy Resources (Jabung) Ltd.,
announced results of its Gemah delineation program on Jabung block, Sumatra Island, Indonesia. On test, three wells on the block flowed at a combined rate of 39 MMcfd of gas and 5,075 b/d of oil and condensate. The block's interest holders are Santa Fe, Kerr-McGee Sumatra Ltd., and Amerada Hess (Indonesia-Jabung) Ltd., each with 30%, and Pertamina Exploration & Produc- tion 10%.

Talisman Energy (U.K.) Ltd.
disclosed the results of an appraisal well that proved an extension of Blake discovery into U.K. North Sea Block 13/29b. The 13/29b-6 well tested 3,950 b/d of 32° gravity oil from a thick section of good-quality lower Cretaceous sandstone. Talisman is negotiating with Blake's operator, Amerada Hess Ltd., to develop Blake as a subsea tie-back to its Ross field floating production, storage, and offloading vessel, which lies 5 km to the north and is due on stream this month. Block 13/29b interest holders are operator Talisman 45%, Amerada Hess 35%, and Statoil (U.K.) Ltd. 20%.

U.S. Department of Energy
plans to establish a Well Construction Technology Center at Norman, Okla. The center will be jointly managed by the University of Oklahoma and Sandia National Laboratories, Sandia, N.M., which is DOE's leading agency for drilling technology.

Catalysts

Targor GmbH, Mainz, Germany, plans to build a plant to manufacture metallocene catalysts for use in polypropylene production. Targor, the polypropylene manufacturing joint venture of Germany's BASF AS and Hoechst AG, intends to build the plant at Ludwigshafen, Germany. It will have capacity to produce 100 metric tons/year of catalysts-enough to manufacture 1 million tons/year of polypropylene. Targor reckons 20% of standard polypropylene will be made with metallocenes by the end of the next decade and sees the new plant as a strategic step in building its worldwide metallocenes licensing business. The plant is due on stream in 2000.

LNG

Japan's JGC Corp. and Kellogg Brown & Root Inc., Houston, agreed to form an alliance in the area of liquefied natural gas plants. Under the agreement's terms, the companies will jointly set up a team for devising marketing strategies and sharing information on projects for LNG plants. The two companies plan to cooperate in about 20 projects in Nigeria, Malaysia, and Australia, said JGC. The agreement came after JGC's rival, Chiyoda Corp., announced it was seeking an equity investment from Kellogg.

Government

U.S. Bureau of Land Management scheduled public hearings on its proposed rule to revamp its oil and gas regulations (OGJ, Dec. 14, 1998, p. 28). The hearings will be Apr. 14 in Midland, Tex., Lakewood, Colo., and Vernal, Utah; Apr. 20 in Washington, D.C., and Casper, Wyo.; Apr. 21 in Farmington, N.M.; and May 12 in Shreveport, La.

Gas storage

Avista Corp., Spokane, Wash., signed an agreement with PG&E Gas Transmission-Northwest (PG&E-NW), a unit of PG&E Corp., San Francisco, to drill and conduct geologic testing on a site to be used for underground natural gas storage near Stanfield, Ore. Testing is scheduled to begin during second quarter 1999. The chosen site is close to PG&E NW's interconnect with Williams's North- west pipeline system.