U.S. BRIEFS

PETROCHEMICALS

TEXACO CHEMICAL CO. let contract to M.W. Kellogg Co. for engineering and equipment and materials for a 400 million lb/year propylene oxide (PO) unit and associated methyl tertiary butyl ether expansion at its Port Neches, Tex., petrochemical complex (OGJ June 24, p. 34). Propylene feedstock for PO production will come from other Texaco plants at Port Neches and Port Arthur, Tex. Tertiary butyl alcohol and methanol will feed an integrated process increasing MTBE capacity to 19,500 b/d from 4,500 b/d.

OCCIDENTAL CHEMICAL CORP. and E.I. du Pont de Nemours & Co. completed expansion of their ethylene glycol plant at Beaumont, Tex., increasing capacity by more than 20% to 850 million lb/year. The project entailed adding a new reactor system and expanding the distributive control computer system. OxyChem operates the plant, a joint venture of the two companies.

ACQUISITIONS

MURPHY OIL CORP. completed a merger with Ocean Drilling & Exploration Co. (OGJ, July 8, p. 23).

TRANSPORTATION

TRANSCO ENERGY CO. and partners plan to lay a $115 million, 47 mile, 30 in., 200 MMcfd gas pipeline from New Jersey to Long Island, N.Y., near John F. Kennedy Airport, to connect with Transcontinental Gas Pipe Line Corp. and Texas Eastern Transmission Corp. systems. Construction is to begin in 1994 pending federal approval. Transco will lay and operate the pipeline. Partners are Panhandle Eastern Corp., Coastal Corp., Brooklyn Union Gas Co., Long Island Lighting Co., and Consolidated Edison Co. of New York.

ASSOCIATED NATURAL GAS INC. agreed to buy Panhandle Eastern's 1,275 mile Wattenberg system in Colorado's Denver-Julesberg basin, including eight compressor stations and related facilities, for $48 million. The purchase is subject to an agreement giving a undisclosed third party an option to match the offer.

MITCHELL ENERGY & DEVELOPMENT CORP. let contract to PB-KBB Inc., Houston, to design and build a 1 bcfd underground gas storage facility in Spindletop salt dome near Beaumont, Tex. After completing Phase 1 in second half 1992, Mitchell will be able to provide storage for as much as 10 bcf of gas to Mitchell's Southwestern Gas Pipeline Inc. unit Winnie Pipeline Co. Capacity will increase to 24 bcf following completion later in the decade of Phase 2 construction. Winnie will own and operate the facility.

AN EXPLOSION at a gas pipeline construction site 5 miles north of Brule, Wis., killed three workers and hospitalized three others. They were laying explosives to prepare for construction of a 460 mile loop on Great Lakes Transmission LP's system when the explosion occurred. The parallel existing pipeline operated by Great Lakes was undamaged. Cause of the accident is being investigated.

LNG

PHILLIPS PETROLEUM CO. received a ruling from the U.S. Tax Court regarding income from its 1 million metric ton/year LNG plant at Kenai, Alas. The court ruling invalidated regulations that classify sales of products from U.S. natural gas wells as entirely domestic income. LNG from the plant is sold to two utilities in Japan, and the major issue in the case was whether income from those sales should be treated as part foreign and part domestic.

DRILLING-PRODUCTION

PENNZOIL CO. will cut its natural gas spot sales by about one-third because of depressed prices. It will continue to restrict sales until prices more fully reflect costs and value of the reserves.

FALCON OIL & GAS CO. INC., Houston, plans to write off two thirds of its proved, undeveloped gas reserves because of continuing low gas prices. Falcon estimates the writeoff will decrease its present worth by about $1.2 million.

EXPLORATION

QUINTANA EXPLORATION CORP., Houston, 1 OCS-G-10605 discovery well flowed 2.03 MMcfd of gas and 393 b/d of condensate through a 13/64 in. choke with 4,750 psi flowing tubing pressure from Oligocene MA-2 sand at 13,044-070. Quintana owns a 25% working interest with other interests held by Whiting-Park Production Partnership Ltd. 25% and PG&E Resources Co. 50%.

NICOR EXPLORATION & PRODUCTION CO., Denver, 7-25 Zackie Walters wildcat in Grady County, Okla.,

flowed 6.3 MMcfd of gas through a 14/64 in. choke with 4,970 psi flowing tubing pressure from Pennsylvanian Lower Cunningham. Total depth is 18,361 ft. Nicor holds 32.9% interest in the well with partners Oryx Energy Co. and John L. Cox, Oklahoma City.

GAS PROCESSING

KN ENERGY INC., Lakewood, Colo., tentatively agreed to acquire Phillips 66 Natural Gas Co.'s Douglas processing plant and gas gathering system in Converse and Campbell counties, Wyo., in exchange for its Tyrone gas gathering system in Beaver and Texas counties, Okla., and an undisclosed sum of cash. Phillips will continue to buy natural gas liquids from the Douglas plant.

COGENERATION

DESTEC ENERGY INC., Houston, signed a sales agreement with Orange & Rockland Utilities Inc., Pearl River, N.Y., covering electrical power to be produced by Destec's Northway gas fired cogeneration project under development. The 57,000 kw plant is to start up in 1994 and provide electrical power to ORUI and steam for industrial processing. Destec is negotiating contracts for fuel supply, transportation, and steam sales.

TANKERS

THE NORWEGIAN FLAG Hitra tanker ran aground in the Mississippi River 6 miles from Baton Rouge, La., July 12 en route to Exxon Co. U.S.A.'s Baton Rouge refinery. The single hull tanker was fully loaded, carrying about 469,000 bbl of crude. There were no injuries or reports of a spill, but the river was closed while investigators checked for damage. The U.S. Coast Guard will offload some of the oil to barges to refloat the vessel.

GOVERNMENT

NEW YORK'S LEGISLATURE voted to repeal the 51.2/Mcf natural gas tax that took effect July 1 (OGJ, June 24, p. 17). The gas tax and a tax on petroleum products were expected to raise about $596 million in revenue. The state will continue to collect the tax for 3 months, raising about $90 million. To offset the loss in revenue the state will increase the tax on personal income exceeding $100,00/year and raise the gross receipts tax on petroleum products to 3.5% from 3%.