INDUSTRY BRIEFS

Gas processing

Petroleos Mexicanos began to restore output at part of its Cactus gas processing complex in Chiapas state, Mexico, following explosions in late July that seriously damaged two 500 MMcfd units and idled more than one fourth of Mexico's processing capacity (OGJ, Aug. 5, p. 22). Partially restarting production allowed the company to trim imports of U.S. gas to 180 MMcfd from 300 MMcfd. One of the two damaged units is expected to be back in full operation in the fourth quarter; rebuilding the other will take until April 1997.

Marketing

Japan's Ministry of International Trade and Industry and Agency of Natural Resources and Energy will abolish gasoline purchase certificates by the end of fiscal 1997. This will scrap a system in place since 1977 requiring service station operators to present the agency a certificate issued by a gasoline supplier before registering stations. The reform eliminates a bottleneck for potential importers of refined products into Japan. The government recently took steps to deregulate imports of refined products (OGJ, Aug. 26, p. 31).

Exploration

Apache Corp., Houston, reported its second discovery in a month on the Khalda concession in Egypt's Western Desert. Salam SW-1X flowed at a combined rate of 49 MMcfd of gas and 2,119 b/d of condensate from 47 ft of net pay in two zones, Cretaceous Alam el Buelb 5A and 5B sands. The 5A zone flowed 21 MMcfd of gas and 990 b/d of condensate from 10,756-10,788 ft through a 1 in. choke with flowing tubing pressure of 1,233 psi. The 5B zone flowed 28 MMcfd of gas and 1,129 b/d of condensate from 10,839-10,854 ft through a 1 in. choke with 1,564 psi flowing tubing pressure.

Total gauged a flow rate of 27.6 MMcfd of gas and 2,596 b/d of condensate in its 1 Stupa wildcat in the Mahakam area off Balikpapan, Kalimantan. The well was drilled to total depth of 3,755 ft in 60 m of water. Hydrocarbons were found in a number of pay sands. Total plans appraisal drilling the next few months. Operator Total and Inpex each holds a 50% interest in a production sharing contract with Indonesian state oil company Pertamina.

Shell International Exploration & Production BV will negotiate with India's government for more exploration areas in the Thar Desert of western Rajasthan. Shell wants to expand exploration in the Jaisalmer district of Ramnagar. Potential reserves are estimated at 2.37 billion bbl of oil equivalent in Rajasthan's Jaisalmer-Bikaner and Naguar basins. Shell previously signed a production sharing contract with India's Oil and Natural Gas Commission covering 10,558 sq km in the Barmer district of western Rajasthan.

Anadarko Petroleum Corp., Houston, signed an exploration and development license agreement with Peru's oil regulatory agency Perupetro SA for Block 84 in Peru's central jungle Ucayali basin. The 30 year agreement, with an option to extend to 40 years if the company finds gas, includes acquiring a minimum of 600 km of seismic data and drilling five exploratory wells at a total program cost of about $57 million. Block 84 is adjacent to the Brazilian border east of Peru's Aguaytia natural gas field.

Canadian Occidental Petroleum Ltd., Calgary, spudded 1 Ejulebe East wildcat on Oil Mining Lease 109 off Nigeria. The well, programmed to 9,700 ft in 50 ft of water about 15 km offshore, will test three zones in a fault block adjacent to the main Ejulebe field, which yielded commercial quantities of oil in two previous wells. Production in Ejulebe field is to begin in 1997. After completing 1 Ejulebe East, another wildcat will be drilled about 6 miles west on the Uteumi prospect.

Gas storage

Wild Goose Storage Inc. (WGSI), San Francisco, a unit of Calgary's Alberta Energy Co. Ltd., acquired a 14 bcf capacity gas storage site near Gridley, Calif., from Dallas partnership Wild Goose Gas Storage LP. The storage site will use the depleted Wild Goose gas reservoir and interconnect to Pacific Gas & Electric Co.'s transmission and distribution system. The project entails a 4.5 mile pipeline and drilling as many as 12 horizontal wells from a single drillpad. Pending approval by state regulators, construction will begin in June 1997 and finish in October 1998.

Pipelines

Transcontinental Gas Pipeline Corp., (Transco), Houston, will ask the Federal Energy Regulatory Commission in November to approve a 75 mile extension of its existing 123 mile lateral in Mobile Bay off Alabama. The expansion will increase capacity by as much as 1 bcfd in an area where several producers have discovered significant reserves. Pending FERC approval, new capacity will be available in November 1997.

Transco filed with FERC plans to expand capacity of its Southeast Louisiana Gathering System in the Gulf of Mexico by about 600 MMcfd. First phase of the project, slated to be in service by November 1997, will add 50.7 miles of 30 in. loop from Ship Shoal Block 14 to Ship Shoal Block 214. Second phase, to be in service by November 1998, will add 26.9 miles of 30 in. loop from Ship Shoal Block 214 to a new junction platform at South Timbalier Block 301. Transco will hold an open season this month to reserve capacity.

Tenneco Energy South Australia Pty. Ltd. reached a compromise with aboriginal groups over a lengthy boundary dispute that stalled construction of an 108 km section of its Queensland gas pipeline. Resolution of the dispute will ensure completion of the project on schedule by yearend. The 756 km line will connect gas fields in Southwest Queensland's Cooper/Eromanga basin to the existing pipeline network in the state's southeast.

Alberta Energy Co. Ltd. and TransCanada PipeLines Ltd. let a $1.75 million contract to Rotork Control (Canada) Ltd. for supply of more than 200 electric valve actuators. These will be installed on the $530 million Express pipeline, designed to carry 170,000 b/d of oil from Alberta to Wyoming beginning January 1997. The contract also calls for 31 solar power actuators and four electrohydraulic units. All are Calgary firms.

Transwestern Pipeline Co., Houston, completed purchase from Northwest Pipeline Corp. for $21.9 million of a 77% interest in the 33 mile, 30 in. La Plata pipeline system from Ignacio, Colo., to Blanco, N.M. Transwestern claims the acquisition gives it access to incremental San Juan basin, Rocky Mountain, and Canadian gas supplies without affecting rates of existing shippers.

Drilling-production

Questar Corp., Salt Lake City, agreed to pay $51 million to an undisclosed private seller for proved reserves near Calgary totaling about 19.6 bcf of gas and 2.9 million bbl of crude oil and gas liquids. Questar will form a new affiliate in Calgary, Celsius Energy Resources Ltd., to manage and develop the properties.

Questar will pay $116 million to PMC Reserve Acquisition Co. for 157 bcf of gas equivalent of gas and oil reserves located mainly in Texas, Oklahoma, and Louisiana. The acquisition increases Questar's reserves 49% from yearend 1995 levels. Current production from the properties is 2,100 b/d of oil and 21 MMcfd of gas. The final agreement will close by Oct. 1 and takes effect Apr. 1, 1997.

Norway's Den norske stats oljeselskap AS (Statoil) let a $50 million contract to Kvaerner AS, Oslo, to supply steel tube umbilicals. Kvaerner claims this is the world's largest contract for this technology. The contractor will supply a total of 160 km of steel tube umbilicals for use in development of Statoil's Gullfaks satellites in the North Sea and Aasgard fields in the Norwegian Sea.

Perez Companc SA, Buenos Aires, hopes to increase output from the marginal Oritupano-Leona oil field in eastern Venezuela to 40,000 b/d from the current 34,000 b/d under its operating contract. The company also won a profit sharing contract for exploration and development on the San Carlos block in western Venezuela and plans to invest about $200 million the next 3 years to develop the block.

Panaco Inc., Kansas City, Mo., agreed to pay $51 million for Amoco Corp.'s stake in 16 blocks in the Gulf of Mexico. The blocks have estimated reserves of 57 bcf of natural gas and 2.7 million bbl of crude oil.

Murphy Oil Corp. closed on a number of sales to undisclosed parties of 48 producing oil and gas fields for a combined price of $47 million. The sales essentially complete a program to dispose of onshore fields with high lifting costs, primarily in Texas, Louisiana, Arkansas, and Mississippi. Murphy will use proceeds from the sales to pay for high-return projects in the Gulf of Mexico that are to come on stream in late 1996 and 1997.

Refining

Tosco Corp., Stamford, Conn., reached an accord with members of the Oil, Chemical and Atomic Workers Union (OCAW), enabling the company to reopen the mothballed Trainer refinery south of Philadelphia that Tosco bought from BP Oil Co. As a result of the agreement, Tosco will commit $50 million to modernizing the refinery which will employ about 360 workers, including 215 OCAW members.

Witco Corp., Stamford, Conn., will shut down its 8,500 b/d Bradford, Pa., refinery by Apr. 30, 1997 unless a buyer is found. Witco is selling the refinery, along with most of its lubricants assets, to concentrate on its core business of chemical manufacturing and marketing.

Lagoven SA, a unit of Petroleos de Venezuela SA (Pdvsa), let a contract to a combine of M.W. Kellogg and Venezuela's Inelectra to build a 72,000 b/d naphtha catalytic cracking unit and a 4,000 b/d tertiary amyl methyl ether unit at Lagoven's Amuay refinery in northern Venezuela. The naphtha cracker will produce about 18,000 b/d of high quality olefins. The project is to be complete in first quarter 1988.

Petrochemicals

Pdvsa unit Pequiven SA let a $90 million lump sum contract to Technip's Italian arm Technipetrol and partner Venezuela's Janteza for design and construction of a 120,000 metric ton/year polyvinyl chloride plant at El Tablazo in Northeast Venezuela. The plant is to come on stream in May 1998.

Borealis AS, the petrochemical joint venture of Finland's Neste Oy and Norway's Statoil, will pay $33 million to revamp cumene and phenol units at its Porvoo complex in Finland. Cumene output capacity will be boosted to 180,000 metric tons/year from 145,000 tons/year, phenol capacity to 130,000 tons/year from 100,000 tons/year, and acetone capacity to 80,000 tons/year from 65,000 tons/year. Construction will coincide with a 1 month turnaround at Neste's Porvoo refinery in fall 1997.

Sinopec's Qilu Petrochemical Co. let a lump sum contract of more than $60 million to Technipetrol to provide services and materials for a 140,000 metric ton/year high density polyethylene plant at Linzi, Zibo, Shandong province, China. The plant is due to come on stream by yearend 1998. Basic engineering will be carried out by Technip.

Companies

NGC Corp., Houston, closed its acquisition of Chevron Corp.'s natural gas business and Warren Petroleum Co. units (OGJ, June 3, p. 24). The merger makes NGC the largest natural gas and gas liquids marketer in North America. NGC paid about $285 million in cash and notes for Chevron's midstream business and assets. Chevron also received about 38.6 million new shares of NGC common stock and 7.8 million shares of participating preferred stock in the new company.

Westcoast Energy Inc., Vancouver, B.C., will cut about 25% of its work force in western Canada pipeline and field services divisions as part of a major restructuring. Westcoast said cost cutting is needed because the pipeline's producer customers continue to face lower than expected gas prices, while pipeline tariff rates have risen to pay for needed capacity additions.

Alternate fuels

Sasol Ltd., Johannesburg, will convert 16 ignition catalyst reformers at its Secunda synthetic fuels plant to open-flame units under a $21.4 million program. Work will begin in February 1997 for completion by October that year. Sasol said the open-flame technology, developed by Haldor-Topsoe AS, Copenhagen, incorporates a new type burner for combustion of methane-rich gas in the reformer process. The new units offer improved efficiency in converting gas to liquids, extended reactor run times, reduced operating and maintenance costs, and greater operating flexibility.

CalEnergy Co. Inc., ConAgra Inc., and Kiewit Energy Group Inc., all of Omaha, will jointly sponsor the Alberta BioClean renewable ethers project in Edmonton, the first application of a patented multiple oxygenate production (MOP) process that converts barley and butane into ethyl tertiary butyl ether and methyl tertiary butyl ether at reduced cost. Construction of the estimated $500 million plant will begin in 1997, with start-up set for early 1999. Fluor Daniel Canada Inc. will provide engineering services.

Catalysts

European Catalysts Manufacturers Association

(ECMA), Brussels, a division of European Chemical Industry Council, published guidelines for disposal of spent catalysts. ECMA said destruction of spent catalysts and recovery of constituent components is the preferred method, while landfill is subject to increasingly stringent controls. The guide outlines European Union regulations on disposal and highlights differences between the laws of member states.