INDUSTRY BRIEFS

Terminals

NGC Oil Trading & Transportation Inc., Houston, is building a condensate storage/barge terminaling system to handle volumes from Johnson's Bayou area, Cameron Parish, La. The complex, with 100,000 bbl storage capacity and more than 20,000 b/d loading capability, will be in service in first quarter 1997. The barge loading facility will be built along the Intracoastal Waterway, near Orange, Tex. An existing pipeline from Johnson's Bayou to the complex will be converted to condensate service.

Exploration

Energy Development Corp., Houston, a unit of Noble Affiliates Inc., Ardmore, Okla., placed its 3 State Lease 13262 discovery well on production in South Pass Block 41 off Louisiana. Drilled to 10,500 ft, the well flowed on test at a rate of 19.8 MMcfd of gas and 131 b/d of condensate. Operator EDC and Flores & Rucks Inc., Baton Rouge, La., each owns a 50% working interest. Electric logs indicated about 173 ft of net pay in three sands.

Benin awarded exploration and production rights to Tarpon Benin SA, a unit of Bettis Group, Dallas, for offshore Block 2. Initial 2-year contract calls for Tarpon Benin to interpret existing seismic data, collect and interpret new data, and drill one wildcat. Exploration rights can be extended for two additional 2-year terms. If successful, the contract provides for a 25-year development term and possible 10-year extension.

Faroese Petroleum Administration requested nomination by Dec. 5 for offshore areas to be included in an exploration licensing round slated for second half 1997. Norway's Den norske stats oljeselskap AS (Statoil) plans to submit nominations. Statoil said 20 companies have shown interest in exploring around the Faroe Islands, which lie roughly halfway between Iceland and northern Scotland. Most are involved in extension of the 1 Lopra stratigraphic test onshore the Faroes, currently being drilled by Denmark's state firm Danop.

Gas marketing

Pennzoil Co., a 50% partner in PennUnion Energy Services Inc., Houston, bought the other 50% interest in PennUnion from Brooklyn Union Gas Co. PennUnion markets about 1.4 bcfd of natural gas, including all of Pennzoil's production.

Drilling-production

BHP Petroleum Pty. Ltd. and partners will abandon production at Suka oil field in the Timor Sea in February 1997. The field, in production since December 1991, has produced nearly 20 million bbl of oil and currently produces about 4,000 b/d. BHP and partners will sell the Suka Venture FPSO, a converted oil tanker. Talks are under way with potential buyers.

North Sea operators Amoco Norway Oil Co., BP Norge UA, and Phillips Petroleum Development Co. Norway will study ways to cut Norwegian fields' operating costs through a commonly owned entity to provide supply and support services. Involved areas are Amoco-operated Valhall/Hod, BP-operated Ula/Gyda, and Phillips-operated Ekofisk. Decision is expected in January 1997. Companies would retain field operatorships. Preliminary studies show efficiency gains can be made via cooperation beyond typical levels.

Shell U.K. Exploration & Production will hold the first seminar in its Brent spar dialogue program in London Nov. 1. The seminar will debate problems of removing the derelict loading buoy from the water and consider proposals for disposal (OGJ, Aug. 19, p. 39). Shell is inviting representatives of universities, professional bodies, consumer groups, and environmental groups to the meeting. It is expected to be the first of a series of similar events on issues facing the disposal team (OGJ, July 15, p. 29).

Shell U.K. Exploration & Production let a 5-year contract for an undisclosed sum to AMEC Process & Energy Ltd., Great Yarmouth, for integrated services in its southern North Sea gas fields and at Bacton gas terminal, Norfolk. The contract follows an earlier 5-year deal.

U.S. Minerals Management Service plans a public hearing in Oklahoma City Oct. 23 to discuss its proposed rulemaking on the valuation of natural gas produced from Indian lands. MMS said the proposed rule would add alternative valuation methods to existing regulations.

Belden & Blake Corp., North Canton, Ohio, drilled 101 of about 200 wells planned in 1996 and added 19.5 bcf gas equivalent of estimated reserves. The company plans to replace at least 125% of 1996 production through drilling. Belden & Blake also purchased a 100% working interest in a 23-mile, 10-in. pipeline and 97 natural gas wells that produce from Devonian New Albany shale in Shrewsbury field, which underlies four counties of northwestern Kentucky.

Vintage Petroleum Inc., Tulsa, reached agreement with Exxon Co. U.S.A. to purchase Exxon's interests in two fields in Escambia County, Ala., for an undisclosed amount. Deal, which includes production equipment, is scheduled to close Oct. 31. Fields, totaling about 5,000 net acres, will be operated by Vintage. Current net production averages about 2.8 MMcfd of gas and 1,450 b/d of oil.

Ranger Oil Ltd., Calgary, and Pierce Field Group partners completed an extended well test (EWT) in BP Exploration Co. Ltd.-operated Pierce field, in the U.K. North Sea, to complete field appraisal. The one-well EWT yielded 1.18 million bbl of oil at an average rate of about 15,500 b/d from a Paleocene sand. Oil, produced into a semisubmersible, was transported via flowline to a nearby tanker. Field studies could lead to a development decision in 1997, with production of about 45,000 b/d commencing in second or third quarter 1998.

Refining

U.S. Justice Department said Atlantic Refining & Marketing Co. Inc. and Sun Co. Inc. (R&M) agreed to a consent decree that resolves alleged violations of the Clean Water Act at a refinery Atlantic owns and Sun operates. The firms, both Sun Co. subsidiaries, will pay a $600,000 civil penalty. They allegedly exceeded permits for discharging pollutants into the Schuylkill River.

Pipelines

Distrigaz SA, Brussels, an Interconnector group partner, disclosed construction of the Interconnector gas pipeline is under way. The 40-in. pipeline, first to link U.K. with continental Europe, is to start up in October 1998 (OGJ, Oct. 14, p. 28). Project is valued at about $7.3 billion. Pipeline will transport about 700 bcf/year to Zeebrugge, Belgium, from a terminal at Bacton, U.K. Meantime, Interconnector (U.K.) Ltd. let a $40 million contract to Framatome SA, Paris, for four compressor trains to be installed at the Bacton terminal. The compressors, to be delivered in fourth quarter 1997, are rated at 30,000 kw and 2,000 psi.

Northern Natural Gas Co., unit of Enron Corp., Houston, filed an application with the Federal Energy Regulatory Commission to increase system peak-day firm transportation service by about 350 MMcfd on an annual incremental basis during 1997-2001. The project is to increase contracted market area peak-day firm entitlements, concentrating on Upper Midwest markets, by 10% at a cost of about $105 million. Plans call for a Nov. 1, 1997, in-service target date. Largest entitlement increase is 244 MMcfd in 1997. Remaining increments will be phased in on Nov. 1 each year through 2001.

Austria's OMV AG completed a 20-km section of its Penta West gas pipeline from Mauerkirchen to Burghausen, Germany. The link has initial capacity of 17.6 bcf/year and became operational Oct. 1. Construction cost $17 million. The Penta West pipeline is slated for completion in 1998, when it will extend 80 km from Oberkappel, Austria, to Burg- hausen, with capacity to carry 245 bcf/year of Russian gas. OMV and Bayernwerk AG applied to extend the pipeline system into northern Italy. The partners seek to ship Norwegian or Russian gas to the growing Italian market.

Mexico's Protexa and Bolivia's state-owned oil company Yacimientos Petroliferos Fiscales Bolivianos (YPFB) agreed to build the Carrasco-Valle Hermoso pipeline in Bolivia's Coche- bamba province. The 225-km pipeline will convert the province into an important oil-producing region, enabling start-up of production of 19,000 b/d. Protexa is investing about $326.3 million and YPFB $6.6 million in the project.

Valero Energy Corp., San Antonio, will expand capacity in its East Texas natural gas pipeline the next 24 months by about 465 MMcfd to support growth of Jurassic Pinnacle reef gas reserves. Virtually all of the expansion will come via addition of compression along the 105-mile pipeline, which currently has capacity of about 400 MMcfd. Estimated cost of the expansion is $11.7 million.

Marketing

British Petroleum Co. plc and fast-food chain McDonald's opened Moscow's first "super station" gasoline/ convenience store outlet. A BP shop there offers more than 2,000 items, including car parts, groceries, snacks, and dry goods, while the McDonald's restaurant is its first drive-in site in Russia. BP hopes to open several more such outlets in the Moscow area next year if this pilot scheme proves a success.

Chevron Corp. opened its first brand-name service station outside North America, in Kazakhstan. The outlet, which sells diesel and three grades of gasoline, can fuel 12 vehicles at once and features a convenience store. Chevron also will introduce pre-paid credit cards at the station. Chevron also is lead company in a group developing supergiant Tengiz and other oil fields in the former Soviet republic for a projected total investment of $20 billion.

A government inquiry into gasoline pricing in British Columbia says there is no evidence of price gouging at the pumps. A 4-month inquiry by the B.C. Utilities Commission reported that steep price increases earlier this year were due to market forces, not gouging. The report found that it would be beneficial to consumers if independent gasoline retailers improved access to wholesale gasoline and that measures could be taken to increase price competition.

Exports-imports

Tesoro Alaska Petroleum Co., Anchorage, purchased about 110,000 bbl of Sakhalin Island crude oil, first load of Russian crude ever imported into Alaska. The Sakhalin crude, lighter and lower in sulfur than North Slope crude, will be processed at Tesoro's Kenai refinery. The plant has processed crudes from Indonesia, Ecuador, Australia, and Malaysia.

Spills

A federal judge in San Juan, P.R., fined three corporations $75 million for spilling more than 750,000 gal of oil in Puerto Rican waters in January 1994, not 750,000 bbl as reported (OGJ, Oct. 7, p. 43).

Companies

IPL Energy Inc., Calgary, increased an offer to buy the remaining 15% of Consumers' Gas Co., Toronto, that it does not already own. IPL will pay $24 (Canadian) cash for each share, or a total of $246 million, for the minority shares. Offer is a 23% premium from the $19.50 that Consumers' shares were trading for Jan. 26 when IPL made an initial offer of $21. Consumers' shareholders will vote on the offer Nov. 28.

Alberta Energy Co. Ltd., Calgary, is selling its two-thirds interest in AEC Power Ltd. to TransAlta Energy Corp., Calgary, for $99.3 million (Canadian). The sale is another move by AEC to divest non-core assets and focus on its petroleum and pipeline interests.

Abraxas Petroleum Corp., San Antonio, signed a letter of intent to purchase 100% of the outstanding stock of Canadian Gas Gathering Systems Inc. (CGGS) for about $85 million. CGGS properties include 48 gross wells representing proved reserves of 10.8 million bbl of oil equivalent, 197 miles of gathering lines, and interest in 11 gas processing plants. Pending completion of financing, Abraxas will merge the acquired operations into its existing Canadian subsidiary, Cascade Oil & Gas Ltd.

Benton Oil & Gas Co., Carpinteria, Calif., will acquire Crestone Energy Corp. in a stock transaction valued at $15.45 million. Benton will issue one share of its common stock for each seven outstanding shares of Crestone's stock. Crestone's primary asset is large, undeveloped acreage in the South China Sea, in the Wan'an Bei WAB-21 area , under contract with the China National Offshore Oil Corp. Crestone would become a Benton subsidiary and continue as operator of WAB-21.

Lubes

Mobil Corp. purchased a 50% stake in Honduras's only lubricants plant in Puerto Cortes and will operate the plant as a joint venture with Venoco, a privately held manufacturer of lubricants based in Caracas. Partners plan to invest about $7 million and eventually raise output to 100,000 b/d. The plant, in which Venoco already was a 50% partner, supplies the Central American market for automotive and industrial lubricants. Mobil and Venoco have another lubricants joint venture in Venezuela.

Environment

Canadian Association of Oilwell Drilling Contractors (Caodc) signed a voluntary agreement with the federal government to reduce greenhouse gas emissions. Caodc will work towards a federal goal of reducing greenhouse emissions to 1990 levels by 2000. Ottawa says Canada has made progress in reducing emissions, but it expects they will be 9.5-10% above 1990 levels in the year 2000. The drilling association says it has already reduced emissions by cutting fuel consumption and using more efficient technology.