INDUSTRY BRIEFS
Refining
Coastal Refining & Marketing Inc. trimmed crude runs about 20% at its 100,000 b/d Corpus Christi refinery after bad weather in the Gulf of Mexico delayed crude loading at undisclosed Mexican ports. The company wouldn't speculate about how long the cut would continue. Coastal units operating refineries at Westville, N.J., Mobile, Ala., and on Aruba were not affected.
ARCO Products Co. will not extend its 10 year crude oil for gasoline exchange agreement with Tosco Corp. The agreement, which expires at yearend 1996, called for ARCO to deliver 50,000 b/d of crude to Tosco's Avon refinery in northern California in exchange for a variable volume of gasoline. Signed in October 1986, the agreement allowed two 5 year extensions at ARCO's election.
Iran's Bandar Abbas refinery construction is 75% complete. The 220,000 b/d plant is the first Iranian refinery designed to process Iranian heavy crude oil. Start-up is scheduled for the end of Iran's fiscal 1996 that starts Apr. 1.
Sharjah Oil Refining Co., a private U.A.E. company, plans a 40,000 b/d refinery at Sharjah. Feasibility studies are complete, and site preparations are under way for the $120-150 million project. It will produce gasoline, middle distillates, liquefied petroleum gas, heavy fuel oils, and asphalt. Plans call for modular units to be built in Canada and shipped to Sharjah in March, with installation to be complete by yearend 1997.
Gas marketing
QuickTrade LLC unit of Enerchange LLC-a unit of affiliates of three large utilities and NGC Corp., Houston-and Energy Exchange Inc., Calgary, began offering 24 hr electronic gas trading information and services at key points on North America's pipeline grid. The QuickTrade system gives producers, local gas utilities, interstate pipelines, marketers, and industrial customers the ability to instantly measure supply and demand, determine price trends, and execute deals, all using real time data.
Pipelines
Mojave Pipeline Co. declared an open season through Feb. 23 for potential shippers seeking firm transportation capacity on its proposed northward expansion project. Mojave needs to reassess demand for the expansion capacity, which might have declined because of competition and inflation during the project's 34 month certification process. Mojave contemplates a 47-53/MMBTU rate for use of the facilities, including 11-13/MMBTU from Topock, Ariz., to Bakersfield, Calif., and 36-40/MMBTU from Bakersfield north.
Shell Offshore Inc. hired Global Industries Ltd., Houston, to lay pipelines for its Tahoe Phase 2 development project in about 1,800 ft of water off Louisiana. The contract calls for more than 65 miles of pipeline to be laid in a 12 mile corridor, with two lines using "pipe in pipe" insulation technology. A third, 44 mile, 6 in. line also will be laid. The project, also involving installation of three termination skids and wellhead jumpers, will allow production to flow from Main Pass 252 to Viosca Knoll 783. Work is to begin this spring.
Alberta Energy & Utilities Board (AEUB) set a 4.3% toll hike for 1995 gas shipments on NOVA Gas Transmission Ltd.'s pipeline in Alberta. Producers will receive a rebate of about $50 million (Canadian) for gas shipped in 1995. NOVA had sought a 16% increase. However, AEUB granted NOVA a capital structure formula of 32% of deemed equity, close to what NOVA requested. Cost of shipping in 1995 will rise about 1.1/Mcf to 26.6. Until August 1995, NOVA was charging about 28/Mcf. A second phase of hearings on tolls now under way will consider how costs are divided among producers, marketers, and aggregators.
U.S. Department of Energy will sell a 130 mile, 8-12 in. natural gas pipeline from Kutz Canyon processing plant near Bloomfield, N.M., to the Los Alamos, N.M., area. The line, laid in the late 1940s to serve Los Alamos National Laboratory, is operated by a predecessor to Public Service Co. of New Mexico (PSC). The lab takes about 50% of the pipeline's 30 MMcfd capacity with the rest going to other customers under contract to PSC. The U.S. Army Corps of Engineers' Mobile, Ala., office will handle the sale.
Valero Transmission Co. unit of Valero Energy Corp., San Antonio, shortened by 1 day the deadline for submitting nominations for gas to flow the first of each month at Waha hub in West Texas. Beginning Jan. 26 for February nominations, shippers will be required to nominate volumes at least 3 business days before the first of the month. Waha hub is the designated delivery point for the western gas futures and options contract that began trading last August on the Kansas City Board of Trade (OGJ, Nov. 13, 1995, p.21).
EOTT Energy Partners LP, Houston, paid Amerada Hess Corp. $54 million for a 265 mile crude oil gathering system and a 349 mile common carrier crude oil pipeline from a Mobile, Ala., terminal to Liberty station in Southwest Mississippi, plus an undisclosed volume of associated crude inventories. The gathering system handles 32,000 b/d of crude from 630 leases. The common carrier receives and delivers crude at the Mobile terminal bound for refinery customers connected to the pipeline and for the Capline pipeline system.
Gas processing
ANGC Corp., a unit of PanEnergy Corp., formerly Panhandle Eastern Corp., Houston, completed the $13 million purchase of three cryogenic natural gas processing plants from Mitchell Energy & Development Corp., The Woodlands, Tex. The deal includes Mitchell's wholly owned Dagger Draw and Pecos Diamond plants in Eddy County, N.M., and its 50% interest in a Port Arthur, Tex., plant. The New Mexico plants have capacities of 40 MMcfd each, the Port Arthur plant, currently operated by ANGC, 150 MMcfd. Combined NGL output of the plants is about 2,100 b/d.
Drilling-production
Kuwait Oil Co. let a $390 million contract to China's state owned China Petroleum Engineering Construction Co. for two oil gathering centers, Middle East Economic Survey reported. The centers will serve Minagish and Umm Gudair fields in West Kuwait and have combined capacity of 410,000 b/d. A 190,000 b/d gathering center has a 27 month construction period, and a 220,000 b/d center is to be finished in 32 months. The project is part of Kuwait's plan to hike productive capacity to 3 million b/d from 2.5 million b/d by 2000. The project was incorrectly reported as two crude oil tank farms to be built under a $350 million contract (OGJ, Jan. 8, p. 26).
PanCanadian Petroleum Ltd. closed its $60 million (Canadian) acquisition of Lasmo Nova Scotia Ltd. effective Jan. 1, 1996, and renamed the former unit of Lasmo plc PanCanadian Nova Scotia Ltd. PanCanadian is now co-operator with Nova Scotia Resources Ltd. of the Copan project, a venture of Lasmo plc and the Nova Scotia government that in 1995 produced 22,000 b/d of oil from Cohasset and Panuke fields off Nova Scotia.
Norway's Den norske stats oljeselskap AS let a 1.5 billion kroner ($230 million) contract to Dresser Rand AS, Kongsberg, Norway, for turbocompressors to be installed as part of development of Aasgard discoveries and Gullfaks field satellites off Norway. The basic contract will involve supply of gas turbine compressor trains and integration with other equipment, along with service and maintenance, for 5 years with optional extensions of 3 years and 2 years. Statoil reckons this deal will save 10% vs. traditional purchase contracts.
Texas Railroad Commission (TRC) amended its 3 year inactive well incentive program to allow commissioners to certify any eligible well without requiring the operator to return the well to production at the time of certification. By filing a test report with the TRC before applying to the state comptroller for the tax incentive, an operator may restore production from a qualified well any time during the 10 years following certification and still receive an exemption from state severance tax.
Nederlandse Aardolie Mij. (NAM) let contract to Stork Protech, Schiedam, Netherlands, to design a platform for the Dutch North Sea. Work involves basic and detailed engineering of the offshore gas production complex L9-FF-01. Productive capacity will be the largest on the Dutch continental shelf at 560 MMcfd. Stork Protech also will design a 20 km, 24 in. gas pipeline to connect the complex to the Nogat trunk pipeline.
Amoco Canada killed an oil and gas well blowout Jan. 1 near Evansburg, Alta. The well blew out Dec. 21, spewing as much as 1,000 b/d of oil and some sweet gas. Well control specialists removed a damaged section of casing and killed the well by pumping mud into the wellbore. Amoco estimated cost of capping the well, land reclamation, and compensation for landowners at more than $3 million.
Futures trading
International Petroleum Exchange, London, claims record trading figures for 1995, when almost 15 million contracts were traded. IPE said this was 3% more than in 1994 and was achieved despite a considerable reduction in oil price volatility compared with 1994. The biggest increase occurred in gas oil futures contracts, which saw almost 4.5 million contracts traded last year, up 19%.
Petrochemicals
Dow Chemical Co. and Thailand's Siam Cement Co. formed a venture to build a $190 million, 300,000 metric ton/year linear low density polyethylene plant at Rayong, Thailand. Construction is to begin next year, with start-up slated for 1999.
COGA Industries LLC, Chicago, plans to build an $850 million urea plant near Girard, Ill., that will produce nitrogen fertilizers via a low cost coal gasification process from more than 1 million tons/year of high sulfur Illinois coal. COGA signed a long term marketing contract for the plant's output with Norsk Hydro AS unit Hydro Agri North America. Construction is to begin in mid-1996, with completion expected in 3 years.
American Clean Fuels Co. (ACF), Stamford, Conn., obtained approval from Texas City, Tex., to site an 8,000-10,000 b/d tertiary amyl methyl ether plant (TAME) there. Start-up of the $100 million project is scheduled for late 1998. ACF claims it is the first independent TAME project in the U.S.
Phillips Petroleum Co. granted polypropylene import licenses to Hoechst AG, Frankfurt, Borealis AS, Copenhagen, Huls AG, Marl, Germany, and Vestolen GmbH, Gelsenkirchen-Buer, Germany. The licenses give the companies the right to import into the U.S. polypropylene homopolymer, random copolymer, and block copolymer as well as finished and semifinished materials made from these polymers.
Exploration
Repsol SA unit Repsol Exploracion Egipto SA and partners found more gas and condensate on the Khalda concession in Egypt. Their 21 Tut wildcat, drilled to 13,400 ft, flowed 59.7 MMcfd of gas and 5,880 b/d of crude oil and condensate. Logs show the well cut 260 ft of net pay in various Jurassic sandstones, reported interest owner Phoenix Resource Cos. Inc., Oklahoma City.
Texaco Inc. agreed in production sharing contracts with China National Petroleum Corp. to explore two contiguous tracts covering a combined 5.4 million acres in South Central China's Sichuan basin. Texaco plans to begin acquiring seismic data on the acreage this year, with exploratory drilling slated for 1997.
Amoco Gabon BV and Phillips Petroleum Gabon Ltd. agreed in a production sharing contract with Gabon to explore the 2.4 million acre Gryphon Marin block off southern Gabon in the Atlantic Ocean. Amoco is operator.
Enterprise Oil plc, London, acquired a farmout on four U.K. North Sea blocks operated by BP Exploration Operating Co. Ltd. Enterprise will earn a 30% interest in Blocks 21/9 and 21/15a, 35% in Block 21/15b, and 40% in Block 22/12a by paying BP's share of costs of a major seismic survey on Blocks 21/9, 21/15a, and 21/15b. The survey started in October and was suspended because of bad weather. It will be resumed early this year.
Commonwealth Oil & Gas Ltd., a unit of A&B Geoscience Corp., Vancouver, B.C. started a $1 million seismic survey of a 233 sq mile concession in the onshore Caspian basin of Azerbaijan. Commonwealth said Azerbaijan's state oil company estimates the area's proved reserves at 463 million bbl of oil and 593 bcf of natural gas.
Companies
Amoco Canada Petroleum Ltd. completed the sale of its remaining 17.5% interest in Crestar Energy Inc. for about $135 million (Canadian). The issue of 7 million shares was bought by about 40 mutual and pension funds for $19.375/share. Amoco was required to sell the Crestar interest as part of an earlier agreement with Ottawa for Amoco's takeover of Dome Petroleum Ltd.
Chevron Corp. will take a noncash, after tax charge of about $800 million for fourth quarter 1995 after adopting Financial Accounting Standard No. 121. The standard sets up a uniform approach to recognize and measure impairment of long lived assets. Almost 85% of the charge relates to adoption of the new standard, mainly affecting Chevron's U.S. oil and gas producing leases. Included in the charge are adjustments to assets made obsolete by conversion of Chevron's two U.S. West Coast refineries to produce reformulated gasoline to California specifications.
Copyright 1996 Oil & Gas Journal. All Rights Reserved.